Ayesha Ahmed - Brand Resonance and the Brand Value Chain BM Lecture 5 6_013213.pptx

Ayesha Ahmed - Brand Resonance and the Brand Value Chain BM Lecture 5 6_013213.pptx

1. Brand Resonance and the Brand Value Chain LECTURE 5& 6

2. Brand Value Chain The brand value chain is a structured approach to assess the sources and outcomes of brand equity and the manner by which marketing activities create brand value. The brand value chain provides insights to support brand managers, chief marketing officers, managing directors, and chief executive officers, all of whom may need different types of information.

3. The Brand Value Chain

4. Value Stages Marketing Program Investment Any marketing program investment that can contribute to brand value development, intentionally or not, falls into this first value stage. Such as, product research, development, and design; trade or intermediary support; marketing communications including advertising, promotion, sponsorship , direct and interactive marketing, personal selling, publicity, and public relations; and employee training

5. Multipliers Program Quality The ability of the marketing program to affect the customer mind-set will depend on its quality. Key considerations: D istinctiveness R elevance I ntegrated V alue E xcellence For example, despite being outspent by such beverage brand giants as Coca-Cola, Pepsi, and Budweiser, the California Milk Processor Board was able to reverse a decades-long decline in consumption of milk in California through the well-designed and executed “Got Milk?” campaign

6. Value Stages Customer Mind – Set The customer mind-set includes everything that exists in the minds of customers with respect to a brand: thoughts, feelings, experiences, images, perceptions, beliefs, and attitudes. 5 As Brand Awareness Brand Associations Brand Attitudes Brand Attachment Brand Activity

7. Multipliers Marketplace Condition The extent to which value created in the minds of customers affects market performance depends on factors beyond the individual customer. Three such factors are: Competitive superiority Channel and other intermediary support Customer size and profile

8. https:// www.youtube.com/watch?v=oapzWU3ttqg https:// www.youtube.com/watch?v=ugp1IhxHT48

9. Value Stages Market Performance Customers react in the marketplace in six main ways. The first two relate to price premiums and price elasticities. How much extra are customers willing to pay for a comparable product because of its brand? And how much does their demand increase or decrease when the price rises or falls? A third outcome is market share, which measures the success of the marketing program in driving brand sales. Taken together, the first three outcomes determine the direct revenue stream attributable to the brand over time. The fourth outcome is brand expansion, the success of the brand in supporting line and category extensions and new-product launches into related categories. This dimension captures the brand’s ability to add enhancements to the revenue stream. The fifth outcome is cost structure or, more specifically, reduced marketing program expenditures thanks to the prevailing customer mind-set. When customers already have favorable opinions and knowledge about a brand, any aspect of the marketing program is likely to be more effective for the same expenditure level. When combined, these five outcomes lead to brand profitability, the sixth outcome.

10. Multipliers Investor Sentiment Financial analysts and investors consider a host of factors in arriving at their brand valuations and investment decisions. Among them are the following: Market dynamics: What are the dynamics of the financial markets as a whole (interest rates, investor sentiment, supply of capital )? Growth potential: What is the growth potential or prospects for the brand and the industry in which it operates? Risk profile: What is the risk profile for the brand? How vulnerable is the brand to those facilitating and inhibiting factors? Brand contribution: How important is the brand to the firm’s brand portfolio?

11. Value Stages Shareholder Value Three particularly important indicators are the stock price, the price/earnings multiple, and overall market capitalization for the firm. Research has shown that not only can strong brands deliver greater returns to stockholders , they can do so with less risk.

12. The Brand Planning Model

13. Identifying and Establishing Brand Positioning Brand positioning is the “act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s minds. P ositioning means finding the proper “location” in the minds of a group of consumers or market segment, so that they think about a product or service in the “right” or desired way to maximize potential benefit to the firm. Good brand positioning helps guide marketing strategy by clarifying what a brand is all about, how it is unique and how it is similar to competitive brands, and why consumers should purchase and use it. Marketers need to know: Who the target consumer is W ho the main competitors are H ow the brand is similar to these competitors H ow the brand is different from them

14. Identifying and Establishing Brand Positioning Target Market 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.

15. Consumer Segmentation Bases Behavioral User status Usage rate Usage occasion Brand loyalty Benefits sought Demographic Income Age Gender Race Family Nature of Good Kind Where used Type of buy Buying Condition Purchase location Who buys Type of buy Demographic Number of employees Number of production workers Annual sales volume Number of establishments Psychographic Values, opinions, and attitudes Activities and lifestyle Geographic International Regional Business-to-Business Segmentation Bases

16. Identifying and Establishing Brand Positioning Nature of Competition Competitive analysis considers a whole host of factors—including the resources, capabilities, and likely intentions of various other firms—in order for marketers to choose markets where consumers can be profitably served. Direct Competition Indirect Competition

17. Identifying and Establishing Brand Positioning Point of Difference PODs: Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand.

18. Identifying and Establishing Brand Positioning Point of Parity POPs Not necessarily unique to the brand but may in fact be shared with other brands. There are three types: Category: necessary—but not necessarily sufficient—conditions for brand choice. They exist minimally at the generic product level and are most likely at the expected product level. Thus, consumers might not consider a bank truly a “bank” unless it offered a range of checking and savings plans; provided safety deposit boxes, traveler’s checks, and other such services; and had convenient hours and ATMs. Competitive: Are those associations designed to negate competitors’ points of-difference . In other words, if a brand can “break even” in those areas where its competitors are trying to find an advantage and can achieve its own advantages in some other areas, the brand should be in a strong—and perhaps unbeatable—competitive position. Correlational: Are those potentially negative associations that arise from the existence of other, more positive associations for the brand.

19. Example: Starbucks Starbucks can define very distinct sets of competitors, which would suggest very different POPs and PODs as a result: Quick-serve restaurants and convenience shops (McDonald’s and Dunkin’ Donuts). Intended PODs might be quality, image, experience, and variety; intended POPs might be convenience and value. Supermarket brands for home consumption ( Nescafé). Intended PODs might be quality, image, experience, variety, and freshness; intended POPs might be convenience and value. Local cafés. Intended PODs might be convenience and service quality; intended POPs might be quality, variety, price, and community

20. Brand Positioning Statement A good brand positioning statement will allow you to present your brand’s purpose and value to its target customers. It tells them why your brand is different in the market and what it is known for. A brand positioning statement can include the following aspects of your brand: What the brand serves Value that it offers What is the unique factor in your brand How you position your offer

21. Examples: Amazon: “Our vision is to be the earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online .” Apple: “To bring the best user experience to its customers through its innovative hardware, software, and services. We believe that we are on the face of the earth to make great products and that’s not changing .” Nike: “At Nike, we’re committed to creating a better, more sustainable future for our people, planet, and communities through the power of sport.”

22. Defining a Brand Mantra As brands evolve and expand across categories, marketers will want to craft a brand mantra that reflects the essential “heart and soul” of the brand. A brand mantra is a short, 3 – 5 word phrase that captures the essence or spirit of the brand positioning. It’s similar to “brand essence” or “core brand promise,” and its purpose is to ensure that all employees and external marketing partners understand what the brand most fundamentally is to represent to consumers so they can adjust their actions accordingly. For example, McDonald’s brand philosophy of “Food, Folks, and Fun” nicely captures its brand essence and core brand promise.

23. Designing a Brand Mantra Brand Function Descriptive Modifier Emotional Modifier The nature of the product or service or the type of experiences or benefits the brand provides. It can range from concrete language that reflects the product category itself, to more abstract notions, where the term relates to higher-order experiences or benefits that a variety of different products could deliver. Clarifies its nature how exactly does the brand provide benefits and in what ways?

24. Example Brand Function Descriptive Modifier Emotional Modifier Nike Performance Athletic Authentic Disney Entertainment Family Fun “authentic athletic performance” “fun family entertainment”