CHAPTER 5:
DESIGNING MARKETING
PROGRAMS TO BUILD
BRAND EQUITY
1
DISCUSSION QUESTIONS
1. Pick a brand. Have you had any experience with a brand that has
done a great job with relationship marketing, permission marketing,
experiential marketing, or one-to-one marketing? What did the
brand do? Why was it effective? Could others learn from that?
2. Visit a department store and evaluate the in-store marketing effort.
Which categories or brands seem to be receiving the biggest in-
store push? What unique in-store merchandising efforts do you
see?
2
Learning Objectives
❑ 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
❑ Summarize the reasons for the growth in private labels
Marketing Mix
4Ps
4
New Perspectives on Marketing
Rapid technological developments
Greater customer empowerment Increased competition and industry convergence
Marketing
Fragmentation of traditional media Globalization and growth of developing markets
Strategy
Growth of interactive and mobile marketing Heightened environmental, community, and
options social concerns
Channel transformation and disintermediation Severe economic recession
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Marketing Mix: 4Ps vs 4Cs
We do not create Products, we create things that
can meet the needs of Customers
Customers do not consider Price, they consider
Cost for the entire purchasing process
Customers change their shopping habits from
familiar locations to convenient shopping methods
Customers' purchasing decisions do not only focus
on Promotion but also rely on how the brand
communicates and creates emotions for them
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Marketing Mix: 4Ps vs 4Cs
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The New Capabilities of the New Economy
Consumers Companies
● Can wield substantially more customer power. ● Can operate a powerful new information and sales
● Can purchase a greater variety of available goods and channel with augmented geographic reach to inform and
services. promote their company and its products.
● Can obtain a great amount of information about ● Can collect fuller and richer information about their
practically anything. markets, customers, prospects, and competitors.
● Can more easily interact with marketers in placing and ● Can facilitate two-way communication with their
receiving orders. customers and prospects, and facilitate transaction
● Can interact with other consumers and compare notes efficiency.
on products and services ● 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.
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A marketing program should be designed to
build brand equity by creating awareness of
your business through advertising, public
relations, social media, events, etc.
INTEGRATING MARKETING
Relationship Product
Personalizing Reconciling the
Inbound Company Different Price
Marketing
Marketing
Approaches
Experiential Place
Creativity must not sacrifice a brand-building goal
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Personalizing Marketing
Experiential Relationship
Marketing Marketing
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Personalizing Marketing
Experiential
Marketing
“…bringing joy to customers,
business is just a coincidence…”
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Personalizing Marketing
• If you charge for stuff, then you are in
the commodity business.
Experiential • If you charge for tangible things, then
Marketing 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
“The idea is not to sell something, but spend with you, then and only then are
to demonstrate how a brand can you in the experience business.
enrich a customer’s life.”
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Personalizing Marketing
Sense
Experiential Feel
Marketing
5
types
Relate
Think
“…five different types of marketing
experiences that are becoming Act
increasingly vital
to consumers’ perceptions of
14 brands…”
Brand Experience Scale
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Personalizing Marketing
• Acquiring new customers can cost five
Relationship times as much as satisfying and retaining
current customers.
Marketing
• The average company loses 10 percent of its
customers each year.
• 5% reduction in the customer defection rate
can increase profits by 25–85%
“Marketing strategies must transcend the • The customer profit rate tends to increase
actual product or service
to create stronger bonds with consumers over the life of the retained customer
and maximize brand resonance.”
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Personalizing Marketing
Relationship Mass
customization
Marketing
Permission One-to-one
marketing marketing
“..three concepts that can be helpful
with relationship marketing...”
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Personalizing Marketing - Relationship Marketing
“The concept behind mass customization,
namely making products to fit the customer’s
Mass
exact specifications”
customization
Permission One-to-one
marketing marketing
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Personalizing Marketing - Relationship Marketing
“…consumers add value by providing information
to marketers; marketers add value by taking that
information and generating rewarding experiences
Mass for consumers…”
customization One-to-one marketing is thus based on several
fundamental strategies:
➢ Focus on consumer databases—“We single out
consumers.”
One-to-one ➢ Respond via interactivity—“The consumer talks to
Permission us.”
marketing marketing
➢ Customize products and services—“We make
something unique for him or her.”
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Personalizing Marketing - Relationship Marketing
“The worse the clutter gets, the more profitable
your permission marketing efforts become.”
Mass Five steps to effective permission marketing:
customization
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.
One-to-one 3. Reinforce the incentive to guarantee that the
Permission prospect maintains his or her permission.
marketing marketing
4. Offer additional incentives to get more
permission from the consumer.
5. Over time, leverage the permission to
20 change consumer behavior toward profits
For example…
One-to-one marketing Permission marketing
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“The goal of any marketing program is to
increase sales and profits”
Reconciling the Different Marketing Approaches
…what exactly they are going
to sell, how (and where) they
are going to sell it, and at what
price… ???
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PRODUCT STRATEGY
Perceived quality
and perceived value The product is at Tangible and
are particularly intangible benefits
the heart of brand
important brand the product
associations equity
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PRODUCT STRATEGY
Perceived Quality
Aftermarketing
• Primary ingredients
• Supplementary
• User manuals
features PRODUCT • Customer service
• Product reliability STRATEGY • Loyalty
• Durability serviceability
• Style
• Design
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PRODUCT STRATEGY
How does product strategy impact brand equity?
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PRODUCT STRATEGY
Describe
product
strategy?
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PRICING STRATEGY
Consumer Price Setting Prices to
Perceptions Build Brand Equity
how consumers categorize the
Value Pricing
price of the brand
• Product Design and Delivery
• Product Costs
how firm or how flexible they • Product Prices
think the price is
Price Segmentation
how deeply or how frequently it is
discounted Everyday Low Pricing
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PRICING STRATEGY
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PRICING STRATEGY
How does pricing strategy impact brand equity?
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CHANNEL STRATEGY
Three key factors: Push and Pull Strategies
• Information Channel Support:
• Entertainment • Retail Segmentation
• Experiences
Channel Design Indirect Channels • Cooperative Advertising
Integrated channels
Company-Owned Stores
allow consumers to
Store-Within-a-Store Direct Channels Online Strategies shop when and how
Other Means
they want
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CHANNEL STRATEGY
CHANNEL STRATEGY
Type of distribution
Retailers 2
1
Manufacturers
Wholesaler
3
CHANNEL STRATEGY
Distributors
E-retailers
5 6
B2B network
Distribution
7
center
3rd-party logidtic
Intermediaries in Distribution Channels
8
provider
9
Online Marketplace
CHANNEL STRATEGY
Intergrate Channel
CHANNEL STRATEGY
How does channel strategy impact brand equity?
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Private-Label Strategies
1. Decrease costs.
2. Cut prices.
3. Increase R&D expenditures to improve products and identify
Major Brand new
product innovations.
Response
4. Increase advertising and promotion budgets.
to Private 5. Eliminate stagnant brands and extensions and concentrate
Labels efforts on smaller number of brands.
6. Introduce discount “fighter” brands.
7. Supply private label makers.
8. Track store brands’ growth and compete market-by-market
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Private-Label Strategies
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Private-Label Strategies
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Thanks for listening