MMK 280 Brand Management Week 1: Marketing, Brands & Brand Management So, what is Marketing? Marketing is the understanding of the customer s needs and the harnessing of the organization s resources to meet those needs, at a profit Marketing as Strategy A model of the marketing process Elements of a marketing system
Marketing strategy and the marketing mix Customer-driven marketing strategy Designing a customer-driven marketing strategy To design a winning marketing strategy, the marketing manager must answer two important questions: What customers will we serve? (i.e. Who is our target market?) How can we serve these customers best? (i.e. What is our value proposition?)
The value proposition Brand versus Product Why do brands matter for consumers? Identification of source of product Symbol of quality assuring customers of product quality and workmanship based on awareness, reputation, prominence or previous experience Assignment of responsibility to manufacturer or seller Reduces the risk in the purchasing choice Functional, physical, financial, social, psychological, and time Lower the search costs reduces time and effort needed to make purchasing decisions Promise, bond, or pact with the manufacturer or seller Trust and loyalty Symbolic device projects self-image Why do brands matter for firms? Simplify product handling and tracing Help organizing inventory and accounting records Offer the firm legal protection for unique features or aspects of the product Provide predictability and security of demand for the firm and creates barriers of entry for competitors Provide a powerful means to secure competitive advantage
So, what is a Brand? A brand is something that resides in the minds of consumers. It reflects the perceptions of the consumers about the brand Label - Who the brand is? Meaning - What the brand does, and why should consumers care? Branding creates mental structures and helps consumers organize their knowledge about products and services in a way that clarifies their decision making, and in the process, creates value for the firm. Key to branding is that consumers should perceive differences among brands in a product category. Related to attributes or benefits of the product or service Related to more intangible image considerations Factors Responsible for Branding Challenges Brand Equity Marketing effects uniquely attributable to a brand Why different outcomes result from the marketing of a branded product than if it were not branded? Principles of branding and brand equity Differences in outcomes arise from the added value endowed to a product as a result of past marketing activity for the brand This added value can be created for a brand in many different ways Brand equity provides a common denominator for interpreting marketing strategies and assessing the value of a brand There are many different ways in which the value of a brand can be manifested or exploited to benefit the firm
Strategic Brand Management Process Week 2 - Customer-based Brand Equity Developing Brand Strategies Great Brands are a result of thoughtful and imaginative planning Carefully designing and implementing creative brand strategies Three models are useful: Brand positioning model chapter 2 (Week 2) Brand resonance model chapter 3 (Week 3) Brand value chain model - chapter 3 Customer-based Brand Equity (CBBE) Approaches brand equity from the perspective of the consumer What do different brands mean to customers? How does the brand knowledge of consumers affect their response to marketing activity? The power of a brand lies in what resides in the minds and hearts of customers. Ensuring customers have the right experiences with products & services desired thoughts, feelings, images, perceptions, opinions, and experiences are linked to your brand. The differential effect that brand knowledge has on consumer response to marketing of that brand. Differential Effect: Positive CBBE: react more favourably to marketing of a brand compared to a fictitious product Negative CBBE: react less favourably to marketing of a brand compared to a fictitious product No effect: Perceived as a commodity, competition based on price
Brand Knowledge: What consumers have learned, felt, seen, and heard about the brand as a result of their experiences over time. What resides in the minds and hearts of the consumers basic premise of CBBE Consumer response to marketing: Reflected in perceptions, preferences, and behaviour related to all aspects of brand marketing Why CBBE is Important for Marketers? A framework that gives marketers the understanding about how consumers perceive a brand and interact with it. Consumer knowledge gives marketers the ability to manage a brand to achieve a competitive advantage over rival brands Marketing Advantages of Strong Brands Improved perceptions related to product performance Greater Loyalty Larger Profit Margins Greater cooperation from suppliers & marketing intermediaries Increased IMC effectiveness More licensing & brand extension opportunities Less vulnerability to competitors marketing actions & marketing crises Favourable consumer response to price changes Response on Blogs How many other brands would get away with only using a single word on a billboard and have people tie it back to the correct product? a brand that is instantly recognizable with such powerful visual cues it has an intrinsic advantage over others marketing communication is linked to the right brand Iconic brands enjoy top-of-mind awareness, and are strongly associated with their specific product categories Brand Equity as a Bridge A strategic bridge from past to the future Means to interpreting past marketing performance and design future marketing programs