Strategic Brand Management

July 1, 2018 Management

This might happen if a company had a major product recall or caused a widely publicized environmental disaster. Brand Equity is the value and strength of the Brand that decides its worth. It can also be defined as the differential impact of brand knowledge on consumers response to the Brand Marketing. Brand Equity exists as a function of consumer choice in the market place. The concept of Brand Equity comes into existence when consumer makes a choice of a product or a service.

It occurs when the consumer is familiar with the brand and holds some favorable positive strong and distinctive brand associations in the memory. Brand Equity can be determined by measuring: * Returns to the Share-Holders. Evaluating the Brand Image for various parameters that are considered significant. I * Evaluating the Brand’s earning potential in long run. I I * By evaluating the Increased volume of sales created by the brand compared to other brands in the same class. *The price premium charged by the brand over non-branded products.

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I I * From the prices of the shares that an organization commands in the market (specifically if the brand name is identical to the corporate name or the consumers can easily co-relate the performance of all the individual brands of the organization with the organizational financial performance. I *OR, An amalgamation of all the above methods. IQ . Defining Category Market for product is big and diverse making it difficult for companies to be able to satisfy every customer. Companies need to identify a certain set of customer within a market and work towards satisfying them.

This set of identification is market segment. Companies further need to understand the intricacy of how this segment behaves and operates. An approach known as target marketing is gaining prominence where companies identify the market segment on similar needs and wants, select one of the market segments and hen focus in developing products and marketing program. Earlier business operation was in the form of mass marketing. In mass marketing companies produce a product in large quantities and serve this product to as many consumers as possible.

This made sense as markets were developing and not much variety was on offering. Now product offerings have under gone radical change thanks to advertising and communication reach. Therefore, companies look forward to marketing at segment, niches, local and individual level. I In segment marketing companies identify consumer with similar needs and wants. For example, an airline is looking forward to providing no frills’ connectivity between metro cities on US east coast compare. This segment is within airline industry but needs of customer is different. T target audience is low budget travelers.

However, customers within the segment look for different attributes, for example, lunch or beverages as part of travel. Here companies can offer this by charging the customer. In niche marketing, companies target limited customer set. A niche market is worth exploring where customers are willing to pay a premium for product, entry barriers are sigh and market has growth potential. In local marketing, customers are local neighborhood, trading stores, etc. For example, many banks prefer local marketing for better understanding of client and provide them right type of service.

In individual marketing, companies look forward to satisfying needs and wants of individual customer. Internet is facilitating the process of individual marketing, where in customer log on to the site and creates products from available options. This process is not feasible for high technology products like automobiles. The market segmentation task has to allow a scientific process. * The first task is to group customer according to product and seen. ‘ice they want. * The second task is to analyze customer by summarizing demographic, lifestyle and usage pattern, which helps in the definition of market segment. The third task is due diligence of the market for growth potential, competition and other factors. * The fourth task is to profitability of market segment. * The fifth task is to undertake positioning activity for pricing and marketing programs. The sixth task is to explore different positioning and marketing strategies to explore the racket to its full potential. There are various factors, which affect segmentation in a consumer market. Geographic is one such factor, where a country is segmented on basis region, city, urban, rural and climate.

Demographically market is segmented on the basis of age, family size, gender, household income, life stage, occupation, education, religion, race, generation and social class. Further, segmentation can be done on the basis of lifestyle and personality traits. On an individual level market can be segmented on the basis Of attitude, belief and perception Of products, product awareness and usage pattern. There are various factors, which affect segmentation in the business market. Demographic is one such factor, which consists of type of industry, size of company and geographical location of the company.

Operational segmentation is on the technology class, customer consumption and customer requirements. Purchasing methodology includes segmentation based on purchase policy, purchase department structure, relation with companies and market positioning of companies. The order Requirements lets segmentation be based on nature of requirement and size of order. Personality trait segmentation looks at loyalty and risk profile. Companies have to finalize target market in which it wants to operate. After which segments have to be identified based of various factors as discussed.

Once segments are identified, in-depth evaluation analysis has to be done come for a conclusion, whether to target one or several segments. I Q. Competitive Frame of Reference Brand positioning refers to “target consumers” reason to buy your brand in preference to others. It is ensures that all brand activity has a common aim; is guided, directed and delivered by the brand’s benefits/reasons to buy; and it focuses at all points of contact with the consumer. Brand positioning must make sure that: * Is it unique/distinctive vs.. Competitors? Is it significant and encouraging to the niche market? * Is it appropriate to all major geographic markets and businesses? ;k Is the proposition validated with unique, appropriate and original products? * Is it sustainable – can it be delivered constantly across all points of contact with the consumer? * Is it helpful for organization to achieve its financial goals? * Is it able to support and boost up the organization? I In order to create a distinctive place in the market, a niche market has to be carefully chosen and a differential advantage must be created in their mind.

Brand positioning is a medium through which an organization can portray it’s customers what it Wants to achieve for them and what it wants to mean to them. Brand positioning forms customer’s views and opinions. Brand Positioning can be defined as an activity of creating a brand offer in such a manner that it occupies a distinctive place and value in the target customers mind. For instance-Kodak Maidenhair positions itself in the customers mind as one entity- “Kodak which can provide customized and one-stop solution for all their financial services deeds. It has an unaided top of mind recall.

It intends to stay with the proposition of “Think Investments, Think Kodak”. The positioning you choose for your brand will be influenced by the competitive stance you want to adopt. Brand Positioning involves identifying and determining points of similarity and difference to ascertain the right brand identity and to create a proper brand image. Brand Positioning is the key of marketing strategy. A Strong brand positioning directs marketing strategy by explaining the brand details, the uniqueness of brand and it’s similarity with the competitive rand’s, as well as the reasons for buying and using that specific brand.

Positioning is the base for developing and increasing the required knowledge and perceptions of the customers. It is the single feature that sets your service apart from your competitors. For instance- Kingfisher stands for youth and excitement. It represents brand in full flight. There are various positioning errors, such as- 1. Under positioning- This is a scenario in which the customer’s have a blurred and unclear idea of the brand. 2. Over positioning- This is a scenario in which the customers have too limited a awareness of the brand. . Confused positioning- This is a scenario in which the customers have a confused opinion of the brand.

Double Positioning- This is a scenario in which customers do not accept the claims of a brand. Q. Factors influencing purchase-Relative Importance of factors Brand Performance Brand performance relates to the ways in which the product or service attempts to meet customers’ more functional needs. Thus, brand performance refers to the intrinsic properties of the brand in terms of inherent product or service characteristics. How well does the brand rate on objective assessments of quality? To what extent does the brand satisfy utilitarian, aesthetic, and economic customer needs and wants in the product or service category’?

The specific performance attributes and benefits making up functionality will vary widely by category. Nevertheless, there are five important types of attributes and benefits that often underlie brand performance and can be measured, as follows: 16 1) Primary characteristics ; supplementary features. Customers Often have beliefs about the levels at which the primary characteristics of the product operate (e. G low, medium, high, or very high). Additionally, they may also may have beliefs as to special, perhaps even patented, features or secondary elements of a product that complement these primary characteristics. ) Product reliability, durability, ; serviceability. Reliability refers to the consistency of performance over time and from purchase to purchase. Durability refers to the expected economic life of the product. Serviceability refers to the ease of servicing the product if it needs repair. Thus, measures of product performance can capture factors such as the speed, accuracy, and care of product delivery and installation; the promptness, courtesy, and lawfulness of customer service and training; the quality of repair service and the time involved; and so on. ) Service effectiveness, efficiency, and empathy. Service effectiveness refers to how completely the brand satisfies customers’ service requirements. Service efficiency refers to the manner by which these services are delivered in terms of speed, responsiveness, etc. Service empathy refers to the extent to which service providers are seen as trusting, caring, and with customer’s interests in mind. 4) Style and design. Consumers may have associations to the product that go beyond its functional aspects to more aesthetic incinerations such as its size, shape, materials, and color involved.

Thus, performance may also depend on 17 sensory aspects as to how a product looks and feels and perhaps even what it sounds or smells like. 5) Price. Finally, the pricing policy for the brand can create associations in consumers’ minds to the relevant price tier or level for the brand in the category, as well as to its corresponding price volatility or variance (in terms of the frequency or magnitude of discounts, etc. ). Q. Possible basis for Differentiation -Segment vs. factor importance Brand knowledge comprises of brand awareness and brand image intricate to establishing of customer based brand equity.

The process is gradual and requires in-depth understanding of consumer mind. Connection between brand and consumer leads to long term partnership and loyalty. And, continued support to marketing efforts of the company. So when a company is trying to build up brand knowledge, Brand Positioning becomes very much relevant. For example, Apple and Windows both are well known brand. Consumers are aware that they both are computer brands dealing in entertainment, but Apple stands for style, cool quotient, pod etc where as Windows stands for world class operating system, quality etc.

Consumer can easily identify point Of similarities and points Of difference between the two brands. This process of creating point of similarities and points of difference in consumer’s mind is called Brand Positioning-Brand positioning strategy is about finding a right place for a brand in market place as well consumer mind. A consumer should easily identify that for a given need or want this is the brand. If brand fails to do this, it simply becomes I just another product or commodity on supermarket or mall shelf.

So for successful brand positioning, following points are of utmost importance for companies; target nonuser, main competitors, point of similarity with competitors and point of difference with competitors. I So, to identify target consumer we must narrow down target market. A market comprises of cluster of individual with similar behavior, referred to as segments. These segments can be defined on basis of personal consumption profile, which includes marital status, consumption Of product, usage rate of product and expectation from product. Another is demographic which includes age, sex, income level, race and family.

Further segmentation can be done on location, if consumer, that s whether they are local or global. Other segmentation can be done on basis of emotional profile, which includes personal belief and values, chosen lifestyle, religious affiliation etc. Another market which is important is business market. Segmentation of business market is starts with product class, meaning target industry (chemical, agriculture etc). Another segment is buying decision, that is, through tender process, bidding process. By end customer (government, not profit organization etc).

Finally segmentation is done on basis of company profile, which includes financial strength and geographical location. Knowing your competitor is very essential for survival in market. SOOT analysis is definitely good starting point. Competition may not be coming from the same product class but maybe from substitute, such as, tea v/s coffee. The point here is that not to narrow down competition too much as to lose focus. In recent time apparel industry has facing competition from consumer electronics industry, as people are willing to spend buck on pod, HDTV to make style statement and not clothes.

Point of difference could be defining in terms of the way consumer thinks for a given brand. These are he points which will make the brand stand out from competition. Point of difference is like unique selling proposition and this difference can be in form of appearance, predictable performance, quality, better customer service. For example Wall-Mart, faces competition not only from Target but also from Macy’s and Shaw. But point of difference is the product range it can offer at competitive prices compared to other stores. Points of similarity are common traits essential to make sure that consumer understand the product.

It helps in enforcing a simple point of identifying product within product class. This comes important especially if brand is in extension mode and looking to enter another category. This is more prevalent in consumer goods industry, such as Old Spice earlier it was focus on shaving product but later moved to grooming products like deodorants. Brand positioning is very important Step in establishing customer based brand equity. Target market, Knowing competitors, Point of difference and Point of similarity together add to strategic branding process.

Q. Segment preference A market is the set of all actual and potential buyers who have sufficient interest in, income for, and access to a product. * Market segmentation divides the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior, and who thus require similar marketing mixes. * Market segmentation requires making tradeoffs between costs and benefits. Segment? * Identifiably: Can we easily identify the segment? Size: Is there adequate sales potential in the Accessibility.

Are specialized distribution outlets and communication media available to reach the Seem -k Responsiveness: How favorably will the segment respond to a tailored marketing program? In current times every company is wanting to be a global player, some impasses this out of compulsion, for some its natural extension, whatever the case companies need to have marketing programs, which can create and sustain brand equity across geographical boundaries and market segments. However, before studying the global view for marketing strategies, it is important to understand regional market segments, profile, etc.

An interesting phenomenon has raised its head in recent time where companies are focusing on regional markets in an effort to counter globalization. In this rationalization, companies focus on geographic locations treating them as market segments. For example, Pepsi has created four regions within LISA to focus on individual market segment and designing a marketing program. The reason why companies are employing a regional approach is that mass markets have to cease to exist, as diversity in form of culture; demographics, etc. Re in the forefront. A typical large US city has Asian, Hispanic and African American population, there are by creating a need for marketing programs, which can make products and services reachable to this audience. I The world is becoming flat just no in terms of communication power but also in terms of migration and movement Of labor across the globe. Globalization is here to stay and every company is in the fray to take advantage of this phenomenon. There could many reasons for which companies may decide to be a global player.

Bigger markets like China and India provide unending opportunities not only as a market but also as production hubs there by reducing overall cost for to be global players. Furthermore, by catering to different markets, companies can reduce the risk as a result of diversification. It is clear there are many reasons for becoming global player, but there are outright advantages also for global marketing programs. Looking at the production side, as production increases per unit cost of the product will decrease, thereby reducing cost of the marketing program.

As standardization increases in packaging, distribution and other marketing activities cost associated with them would decrease. For example, Sony its marketing campaign has universal appeal thereby assigning equal cost to products and geographies. Another advantage is that with global presence and acceptance confidence with consumer reaches altogether a different level. It creates a sense of pride and ownership looking at the universal demand for the product. With the uniform marketing program across geographical boundaries, companies can have consistent brand knowledge, this is especially important for mobile consumers.

Furthermore, another advantage for companies is the ability to sell a good product universally at one go, thereby gaining a complete first mover advantage. But with advantages in operating on a global there are also challenges and disadvantages. With standardization companies are unable to satisfy needs of consumer, which comes with different culture, demographics, etc. , For example, consumption of carbonated drinks and beer is much more n ASSAI, Australia in comparison to that of India and China.

As perception and needs vary from culture to culture, consumer response to a standard marketing program may not equally have felt as per company acceptation. Every product undergoes a life cycle which begins from the day it is launch in the market, so every geographical location may be having different product life cycle stage, so marketing programs also accordingly have to vary. Other challenge companies face is that of environmental like social, political and regulatory. Therefore, a brand to succeed across geographical boundaries impasses need to device marketing programs, which can create global consumer based brand equity.

And for that marketing programs have to highlight point of differences and point of similarities across boundaries. Furthermore, companies should understand brand building is tedious and time consuming. Brand name, logos, symbol has to be designed in a way that it properly communicates brand knowledge and not creates confusion in consumers mind. And at the same time construct and execute a global brand equity measurement system so that focus always remains of develop a strong consumer based brand equity. Q. Brand Equity parameters -Awareness/ Preference/Perceived Quality/Brand Associations Factors contributing to Brand Equity 1 .

Brand Awareness Brand awareness is the probability that consumers are familiar about the life and availability of the product. It is the degree to which consumers precisely associate the brand with the specific product. It is measured as ratio of niche market that has former knowledge of brand. Brand awareness includes both brand recognition as well as brand recall. Brand recognition is the ability of consumer to recognize prior knowledge of brand when they are asked questions about that brand or when they are shown that specific brand, I. E. , the consumers can clearly differentiate the brand as having being earlier noticed or heard.

While brand recall is the potential of customer to recover a brand from his memory when given the product class/category, needs satisfied by that category or buying scenario as a signal. In other words, it refers that consumers should correctly recover brand from the memory when given a clue or he can recall the specific brand when the product category is mentioned. It is generally easier to recognize a brand rather than recall it room the memory. Brand awareness is improved to the extent to which brand names are selected that is simple and easy to pronounce or spell; known and expressive; and unique as well as distinct.

For instance – Coca Cola has come to be known as Coke. There are two types of brand awareness: 1 . Aided awareness- This means that on mentioning the product category, the customers recognize your brand from the lists of brands shown. 2. Top of mind awareness (Immediate brand recall)- This means that on mentioning the product category, the first brand that customer recalls from his mind is your brand. The relative importance of brand recall and recognition will rely on the degree to which consumers make product-related decisions with the brand present or not.

For instance – In a store, brand recognition is more crucial as the brand will be physically present. In a scenario where brands are not physically present, brand recall is more significant (as in case of services and online brands). Building brand awareness is essential for building brand equity. It includes use of various renowned channels of promotion such as advertising, word of mouth publicity, social media like blobs, sponsorships, launching events, etc. To create brand awareness, it is important to create reliable brand image, slogans and tastiness. The brand message to be communicated should also be consistent.

Strong brand awareness leads to high sales and high market share. Brand awareness can be regarded as a means through which consumers become acquainted and familiar with a brand and recognize that brand. 2. Brand Associations Brand Associations are not benefits, but are images and symbols associated with a brand or a brand benefit. For example- The Nikkei Swoosh, Monika sound, Film Stars as with “Lug”, signature tune Ting-ting-TA-ding with Britannic, Blue color with Pepsi, etc. Associations are not “reasons-to-buy” but provide acquaintance and differentiation that’s not replicable.

It is relating perceived qualities of a brand to a known entity. For instance- Hyatt Hotel is associated with luxury and comfort; BMW is associated with sophistication, fun driving, and superior engineering. Most popular brand associations are with the owners of brand, such as – Bill Gates and Microsoft, Reliance and Diarrhea Mambas. Brand association is anything which is deep seated in customer’s mind about the brand. Brand should be associated with something positive so that the customers relate your brand to being positive.

Brand associations are the attributes of brand which come into consumers mind when the brand is talked about. It is related with the implicit and explicit meanings which a consumer relates/associates with a specific brand name. Brand association can also be defined as the degree to which a specific product/service is recognized within it’s product/service class/category. While choosing a brand name, it is essential that the name chosen should reinforce an important attribute or benefit association that forms it’s product positioning.

For instance – Power book. Brand associations are formed on the following basis: Customers contact with the organization and it’s employees; Advertisements; * Word of mouth publicity; * Price at which the brand is sold; * Celebrity/big entity association; * Quality of the product; * Products and schemes offered by competitors; * Product class/category to which the brand belongs; * POP ( Point of purchase) displays; etc Positive brand associations are developed if the product which the brand depicts is durable, marketable and desirable.

The customers must be persuaded that the brand possess the features and attributes satisfying their needs. This will lead to customers having a positive impression about the reduce. Positive brand association helps an organization to gain goodwill, and obstructs the competitor’s entry into the market. 3. Brand Loyalty Brand Loyalty is a scenario where the consumer fears purchasing and consuming product from another brand which he does not trust.

It is measured through methods like word of mouth publicity, repetitive buying, price sensitivity, commitment, brand trust, Customer satisfaction, etc. Brand loyalty is the extent to which a consumer constantly buys the same brand within a product category. The consumers remain loyal to a specific brand as long as it is available. They do not buy from other suppliers within the product category. Brand loyalty exists when the consumer feels that the brand consists of right product characteristics and quality at right price.

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