Lecture 4 chapter 5 introduction to marketing

Marketing lecture

1. BE501 Introduction to Marketing Dr Polly Sokolova Lecture 4 – 9/02/2024

2. Lecture 4 Positioning & Branding

3. Today Quick Recap Positioning Branding Homework

4. 1. Quick Recap

5. STP Market segmentation refers to dividing the markets into segments of customers. Target marketing refers to which segments to go after. Positioning - the company must decide how it will differentiate and position itself in the marketplace .

6. Segmenting Consumer Markets based on certain key customer-related , product-related or situation-related criteria . These are classified as segmentation bases/criteria: Profile Criteria – who are my customers and where are they? Behavioural Criteria – where, when and how do my customers behave? Psychological Criteria – why do my customers behave that way?

7. Segmentation Bases Consumer Criteria Chart

8. Targeting According to Kotler (1984), for market segmentation to be effective, all targeted segments must be: Distinct – is each segment clearly different from other segments? Accessible – can buyers be reached through appropriate promotional programmes and distribution channels? Measurable – is the segment easy to identify and measure? Profitable – is the segment sufficiently large to provide a stream of constant future revenues and profits?

9. Benefits of STP Enhancing a company’s competitive position Identifying market growth opportunities Efficient matching of company resources to target market segments

10. Segmentation Challenges The needs of segment members may change over time. Consequently, members may switch to different segments. M arket segmentation programmes must always use current customer data. Marketing Managers need to make sure that everyone is working towards the same customer segment. Labels can mean different things to different people.

11. Segmentation Limitations The market segmentation process is often problematic because an offering can have multiple applications. (Griffith and Pol, 1994) Product Differentiation and Positioning need to be taken into account (next week).

12. 2 Positioning

13. The STP Process

14. Positioning The act of designing the company’s offering and image so that they occupy a meaningful and distinct competitive position in the target customers’ minds. Positioning is about differentiating an offering from its competitors to give consumers a reason to buy it. It’s about identifying a unique selling proposition (USP), such as the fastest delivery service, the freshest ingredients or the best customer service. “What you have that competitors don't.” It’s about identifying a sustainable competitive advantage .

15. Positioning

16. Positioning Positioning incorporates three processes: Step 1: Identifying an attractive position in the market different from/superior to where competitors are positioned. Step 2: Defining this position.

17. Perceptual Mapping

18. Perceptual Mapping Perceptual Maps- key tool for positioning. They are visual representations of a market. They are used to determine how you and your competitors are perceived, according to the key attributes that the target segment values. Perceptual maps therefore make explicit the link between the Customer Analysis and the Competitor Analysis. Customer values determine the labels of the axes (these need to be a continuum). Competitors are positioned accordingly. AIM: To find or to create a gap in the market.

19. Perceptual Mapping The aim is to find a gap in the market

20. Positioning Step 3: Communicate this unique position The aim is to position the brand within the mind of the target audience . It is ‘not what you do to a product, it is what you do to the mind of a prospect’ ( Ries and Trout, 1972) that determines how a brand is really positioned in a market. This is why marketing communications and advertising are so important. They can convey particular information about a brand and frame the brand in a particular way to adjust the perceptions that customers have.

21. Positioning ‘ Market Positionings ’ are often defined by the functional attributes and benefits of brands. ‘ Mind Positionings ’ are usually defined by symbolic values and emotions communicated through branding and advertising. A positioning can be defined functionally and emotionally.

22. Functional Benefit Unique Taste Refreshing

23. Emotional Benefit

24. Repositioning Strategies Change the tangible attributes and then communicate the new proposition to the same market. “New and Improved”

25. Repositioning Strategies 2: Change the way a product is communicated to the original market .

26. Repositioning Strategies 3: Change the target market and deliver the same product .

27. Repositioning Strategies 4: Change both the product ( attributes) and the target market .

28. 2 Brand ing

29. Brand “a brand is represented by a name, symbol, words or mark that identifies and distinguishes it.”

30. Branding Branding adds value. It is a process that helps customers to differentiate between various market offerings. If this differentiation can be achieved and sustained, then a brand is considered to have a competitive advantage . It enables customers to make associations between certain ideas or feelings and a particular brand. Although marketers have to create, sustain, protect and develop brands, it is the customer’s perception that is important. Customers form images and give meaning and value to brands. Co-creation .

31. Branding Brands are constructed of two main types of attribute: Intrinsic and Extrinsic Intrinsic Attributes The functional characteristics of a product (shape, performance, physical capacity, etc.) Changing an intrinsic attribute directly alters the product.

32. Branding Extrinsic Attributes External devices such as brand name, marketing communications, packaging, price, place, etc. If changed, does not alter the material functioning and performance of the product itself. https://www.youtube.com/watch?v=CRiv2lgaX_U https://www.youtube.com/watch?v=z2T-Rh838GA

33. Brand Associations Brand associations are memory nodes linked to a brand in the long term memory. A brand image is the total set of associations linked to a brand.

34. Brand Associations Intrinsic attributes Functional / rational benefits Extrinsic attributes Emotional / symbolic benefits Non-product related attributes (Price, place, packaging) Situations

35. Primary and Secondary Associations Primary assosiations Mercedes Audi High quality Prestige BMW Prestige High quality Prestige High quality

36. Primary and Secondary Associations Primary associations Mercedes Audi High quality Prestige BMW Prestige High quality Prestige High quality Secondary assosiations Silent/no noice Large cars Royal / offical Formal Competent Respected Intelligent Driving experience Efficient Design Driving experience Large engine Quattro Well equiped Self- confidence Sporty Winter ”Family-sporty” Joy of driving

37. Brand Personality   Many brands are deliberately imbued with human characteristics. friendly approachable distant calculating honest fun robust caring Marketing Communications play an important role in communicating the essence of a brand’s personality.

38. Brand Personality   Aaker (1997) developed the Brand Personality Scale, which consists of five psycho-social meaning

39. Brand Personality   Consumers search for brands that compliment their self-concept (McCracken, 1986). Brands offer consumers a means of self-expression (Belk, 1988). Actual self Ideal self Brands provide means for individuals to indicate to others their personality. Self-congruence theory  posits that consumers respond more positively to brands that are in line with their self-concept  ( Sirgy , 19 97 ), thus predicting consumers' attitudes and purchase intention ( Aaker , 1999).

40. Brand Portfolio Collection of smaller brands that fall under a larger 'brand umbrella' set by a company. 

41. Brand extension High failure rates of new products: 72-88%. Brand extension better performance but no guarantee of success. Brand extension “ use of established brand names to enter new product categories or classes ” (Keller & Aaker, 1992, p.35). Number of empirical studies on success factors affecting brand extensions. Learn lessons of best practice. Consumers evaluate brand extensions based on their attitude to the parent brand and the extension category ( Czellar , 2003).

42. Brand extension examples

43. Brand extension: Fit Perception Perceived fit is characterised by the number of shared associations between the extension product category and the brand. 2 dimensions of fit construct: a) product category fit, refers to the perceived similarity between the extension category and the existing product categories of the parent brand. b) brand level fit , match between the specific image of the brand and the extension product category.

44. Brand Equity Brand equity is the set of assets (and liabilities) linked to a brand’s name and symbol that adds (or subtracts from) the value provided by a product or service to a firm and /or that firm’s customers ( Aaker , 199 2 ). Brand equity is the added value endowed by the brand to the product. It is the simple difference between the value of a branded product, and the value of that product without that brand name attached to it (Rosenbaum-Elliott, 2015)

45. W hat are the benefits of strong brands? High consumer loyalty (less price sensitive; more forgiving) Higher market share, profit & ROI B argaining power and trade leverage B arrier to entry for competitors E nable brand extensions R educe promotional costs

46. 5. Homework

47. Homework Week 4 quiz - in My MarketingLab Read chapter 7 & 10 of Marketing Management

48. Any Questions?

49. Thank you very much!