Marketing

Chapter : 9 CREATING BRAND EQUITY

 One of the most valuable intangible assets of a firm is its brands

 It is incumbent on marketing to properly manage their value
 Building a strong brand requires careful planning,a deep long term commitment and creatively
designed and executed marketing.
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The Strategic brand management process has four main steps
 Identifying and establishing brand positioning
 Planning and implementing brand marketing
 Measuring and interpreting brand performance
 Growing and sustaining brand value deals with positioning

BRAND EQUITY

BRAND : A name, term, sign, symbol, or a design, or a combination of them,

intended to identify the goods or services of one seller or group of sellers and to
differentiate them from those of competitors.

Basically anything that differentiates you. These differences maybe functional,

rational, or tangible – related to product performance of the brand represents or
means in a more abstract sense.

WHAT ARE THE ROLE OF BRANDS?

 Brands identify the source or maker of a product and allow consumers to

assign responsibility for its performance to a particular manufacturer or
distributor.
 Consumers may evaluate the identical product differently depending on
how it is branded.
 They learn about brands through past experiences.
 Brands also perform valuable functions for firms
 They simplify product handling or tracing
 They help to organize inventory and accounting records.
 A brand also offers the firm legal protection for unique features or aspects
of the product.
 A credible brand signals a certain level of quality so that satisfied buyers can
easily choose the product again.

 Brand loyalty provides predictability and security of demand for the firm.
 Also creates barriers to entry for other firms.
 Branding can be a powerful means to secure a competitive advantage.
 Sometimes marketers don’t see the real importance of brand loyalty until
they change a crucial element of the brand.
 For better or worse, branding effect are pervasive. One research study that
provoked much debate about the effects of marketing on children showed that
preschoolers felt identical McDonald’s food items- even carrots, milk, and apple
juice- tasted better when wrapped in McDonald’s familiar packaging than in
unmarked wrappers.

THE SCOPE OF BRANDING

 Branding is endowing products and services with the power of a brand.

 Branding creates mental structures that help consumers organize their
knowledge about products and services in a way that clarifies their decision
making and in the process, provides value to the firm.
 Brand differences often relate attributes or benefits of the product itself.
 Marketers can apply branding virtually anywhere a consumer has a choice.

BRAND REQUITY

It is the added value endowed on products and services. It may be reflected in the way consumers
think,feel,and act with respect to the brand, as well as in the prices,market share and profitability the
brand commands.

The commercial value that derives from consumer perception of the brand name of a particular product
or service rather than from the product or service itself.

Example : APPLE

Although apple or the company’s product are very similar in terms of features to other brands, the
demand, customer loyalty, and company’s price premium are among the highest in consumer tech
industry.

Marketers and researchers use various perspectives to study brand equity. Customer-based-approaches
view it from the perspective of the consumer- either an individual or an organization- and recognize that
the power of a brand lies in what customers have seen,read,heard,learned,thought and felt about the
brand overtime.

Example : to reinforce its luxury image, Louis Vuitton uses iconic celebrities such a legendry rolling
stones rockstar Keith Richards in print and outdoor advertisements.

CUSTOMER-BASED BRAND EQUITY

Is the differential effect brand knowledge has on consumer response to the marketing of the brand.

 Positive customer-based brand equity: when consumer reacts more favorably to a product and
the way it is marketed when the brand is identified, than it is not identified.
 Negative customer-based brand equity: if consumer reacts less favorably to marketing activity
for the brand under same circumstances.

There are three key ingredients of customer-based equity

  Brand equity arises from difference in consumer response. If no difference occur,the brand
name product is essentially a commodity,and a competition will probably be based on price.
 Differences in response are a result of consumer’s brand knowledge, all the
thoughts,feelings,images,experiences and beliefs associated with the brand. Brands must breate
strong,favorable,and unique brand associations with customers,as have Toyota and others.
 Brand equity is reflected in perceptions,preferences and behavior related to all aspects of
marketing a brand. Stronger brands lead to greater revenue.

BRAND EQUITY MODELS

Although marketers agree about branding principles. But there are a number of brand equity models
which offer some differing perspectives.
Here are 3 established models.

1-BRANDASSET VALUATOR

Y&R developed a model of brand equity called BAV. It compares the brand equity of thousands of
brands across hundreds of different categories.
There are four key pillars of brand equity according to BAV

 ENERGIZED DIFFERENTITATION : measures the degree to which a brand is seen as different

from others, and its perceived momentum and leadership.
 RELEVANCE : measures the appropriateness and breadth of a brand’s appeal
 ESTEEM : measures perceptions of quality and loyalty , or how well brand is regarded and
respected.
 KNOWLEDGE : measures how aware and familiar consumers are with the brand

ED and RELEVANCE combine to determine brand strength- a leading indicator that predicts future
growth and value. ESTEEN and KNOWLEDGE together create brand stature., a report card on past
performance and a current indicator of current value. According to BAV analysis, consumers are
concentrating their devotion and purchasing power on an inscreasingly smaller potfolio of special
brands.

2-BRANDZ

Marketing research consultants Millward and WPP developed BrandZ model of brand strength, at the
heart of which is the BrandDynamics pyramid. For any one brand,each person interviewed is assigned
to one level of the pyramid depending on their responses to a set of questions. The branddynamics
pyramid shows the number of consumer who have reached each level.

 PRESENCE Active familiarity based on past trial, saliency, or knowledge of brand promise.
 RELEVANCE Relevance to consumer’s needs, in the right price range or in the consideration set
 ADVANTAGE Belief that the brand has an emotional or rational advantage over other brands in
the category.
 BONDING Rational and emotional attachments to the brand to the exclusion of most other
brands.
 Bonded consumers at the top of the pyramid build stronger relationships with and spend more
on the brand than those at lower levels.

3- BRAND RESONANCE MODEL

The brand resonance model also views brand building as an ascending series of steps, from bottom to
top
(1) Ensuring customers identifying the brand and associate it with a specific product or class

(2) Firmly establishing the brand meaning in customer’s minds by strategically linking a host of tangible
and intangible brand associations.

(3) Eliciting the proper customer responses in terms of brand-related judgement and feelings ;
(4) Converting customers’ brand response to an intense, active loyalty
1. Brand Salience: The brand salience means, how well the customer is informed about the product and
how often it is evoked under the purchase situations?

The marketer should not only focus on just creating the awareness about the product but also includes
the ease with which the customers can remember the brand and the ability to recall it under the
different purchase situations.

2. Brand Performance: The Brand performance means, how well the functional needs of customers are
met?

At this level of the pyramid, the marketers check the way in which product is performing and how
efficiently it is fulfilling the needs of the customers.

3. Brand Imagery: The Brand Imagery means, what product image the customer create in their minds?

This aspect deals with the customer’s psychology or the feelings that how they relate to the product in
terms of their social needs.

4. Brand Judgements: The Brand Judgement means, What customer decides with respect to the product?

The customers make the judgment about the product by consolidating his several performances and the
imagery associations with the brand. On the basis of these, the final judgment is made about the
product in terms of its Perceived Quality, Credibility, Consideration, and Superiority.

5. Brand Feelings: The Brand feelings means, what customers feel, for the product or how the customer is
emotionally attached to the product?

The consumer can develop emotions towards the brand in terms of fun, security, self-respect, social
approval, etc.

6. Brand Resonance: The Brand Resonance means, what psychological bond, the customer has created
with the brand?

This is the ultimate level of the pyramid, where every company tries to reach. Here the focus is on
building the strong relationship with the customer thereby ensuring the repeated purchases and
creating the brand loyalty.

The resonance is the intensity of customer’s psychological connection with the brand and the
randomness to recall the brand in different consumption situations.

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BRAND DYNAMICS PYRAMID (BDP)

BrandDynamics™ is a system of brand equity measurements, based on Millward Brown's Meaningfully

Different Framework, that reveals your brand's current equity and opportunities for growth.

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BUILDING BRAND EQUITY

 Marketers build brand equity by creating the right brand knowledge structures with the right
consumers.
 From a marketing management perspective, however, there are three main sets of brand equity
drivers :
(1) The initial choices for the brand elements or identities making up the brand
Example: microsoft chose the name BING
(2) The product and service and all accompanying marketing activities and supporting
marketing programe
Example: an affordable luxury brand
(3) Other association indirectly transferred to the brand by linking it to some other entity

Example: the brand name of new Zealand vodka 42BE-LOW refers to both a latitude that
runs through NZ and the percentage of its alcohol content.

WAYS TO BUILD BRAND EQUITY :

CHOOSING BRAND ELEMENTS

 Brand elements, aka brand identities are those trademarkable devices that serve to identify
and differentiate the brand. The main ones are brand names, URL's, LOGOS, Symbols,
Characters, Spokespeople, Slogan, Jingles, packages and signatures.

1) Memorability:-Memorable or attention-getting brand elements facilitate the recognition and recall of

a brand during purchase process or consumption. Short brand names are usually easily memorized &
recalled by a large percentage of customers. For Example: –
LG – Life is good

2) Meaningfulness: –Marketers need to ensure that brand elements take on either “descriptive” or
“persuasive” meaning. This could be general information about the nature of the product category or
specific information about the particular attributes or benefits of the brand. This is important to develop
awareness and recognition for the brand.
Few examples of meaningful brands elements;

Fair & lovely Cream FedEx Courier Close-up Tooth Paste

3) Likability:-Brand Elements need to be inherently fun & interesting. They also need to be visually rich
& aesthetically pleasing and appealing to the target customers.
Few examples of likable brand elements :
Heineken Packaging Air India

The above 3 criteria constitute the “Offensive Strategy” that focuses on building brand equity. That
means if the brand elements are memorable, meaningful and likable there are more chances that they
will be recognized by most of the customers which in turn will build brand equity, reduce the burden on
the marketers and thereby reduce the cost of marketing communications & activities.

4) Transfer-ability:-means the extent to which brand elements can enhance brand equity to new
products of the brand in the line extensions or in other way, can the brand elements be used to
introduce new products in the same or different categories. It also means that to what extent brand
elements are able to improve brand equity across geographical boundaries and market segments.
For example, “Apple” and “Blackberry” as brand names represent fruits, thus they don’t restrict brand
and product extensions.

5) Adaptability:-is the extent to which brand elements can be adapted over time. Consumer
perceptions, opinions & preferences keep changing over time. Generally, the more flexible the brand
element, the easier it is to update from time to time to synchronize with consumers preferences and
trends. Logos and characters can be given a (slightly) new look & feel to make them appear more
modern and relevant.
For example, Coca -Cola has been consistently updating its logo over the years to synchronize with the
latest trends and opinions.

6) Protect-ability:-means the extent to which brand elements can be protected legally & competitively.
Brand elements need to be chosen in such a way, that they can be internationally protected by
registering with appropriate legal bodies. Marketers also need to defend their trademarks from
unauthorized competitive infringements.
The latter 3 criteria constitute the “Defensive strategy” towards leveraging and maintaining brand
equity. That means if the brand elements are transferable, adaptable and protect able, they are more
likely to leverage and maintain the brand equity.

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DEVELOPING BRAND ELEMENTS

 Can play a number of brand building roles.

 Many insurance firms use symbols of strength for their brands
 Brand names,slogans are an extremely efficient means to build brand equity.

DESIGNING HOLISTIC MARKETING ACTIVITIES

 Customers come to know a brand through a range of contacts and touch points.
 A brand contact is an any information-bearing experience, whether positive or negative, a
customer or prospect has with the brand, its product category or its market.
 Integrated marketing is about mixing and matching these marketing activities to maximize their
individual and collective effects.
 Marketers need a variety of different marketing activities that consistently reinforce the brand
promise.
  We can evaluate integrated marketing in terms of the effectiveness and efficiency with which
they affect brand awareness and create, maintain or strengthen brand association and image.

Leveraging Secondary Associations

The third and final way to build brand equity sources, is,in effect to ‘ borrow it ‘ .

 Create brand equity by linking the brand to other information in memory that conveys meaning
to consumers
 These ‘secondary’ associations can link the brand to sources such as the company itself, to
countries and other geographical reigons.
 For example, Nokia, when it introduce mini laptop it was referred as Nokia 3G Booklet there
are creating association, as consumer are already aware Nokia mobile phones.

INTERNAL BRANDING

 IB consists of activities and processes that help inform and inspire employees about brands.
 Holistic marketers must go even further and train and encourage distributors and dealers to
serve their customers well.
 Brand bonding occurs when customers experience the company as delivering on its brand
promise.
 Disney is so successful at internal branding that it holds seminars on the “Disney style” for
employees from other companies.
 Some important principles for internal branding are :
1- Choose the right moment
2- Link the external and internal marketing
3- Bring the brand alive for employees

BRAND COMMUNITIES

 BC is a specialized community of consumers and employyes whose identification and activities

focus around the brand.
1- A “consciousness of kind” or sense of felt connection to the brand, company, product, or
other community members.
2- Shared rituals, stories, and traditions that help to convey the meaning of the community
3- A shared moral responsibility or duty to both the community as a whole and individual
community members.

A strong brand community results in a more loyal, committed customer base. A brand community can
also be a constant source of inspiration.

MEASURING BRAND EQUITY

Indirect approach : asses potential sources of brand equity by identifying and tracking consumer brand
knowledge structures.

Direct approach : assess the actual impact of brand knowledge on consumer response to different
aspects of marketing.

The brand value chain shows how the two approaches.

  THE BRAND VALUE CHAIN is a structured approach to assessing the sources and outcomes of
brand equity and the way marketing activities create brand value.

Brand value creation begins when the firm targets actual or potential customers by investing in
a marketing program to develop brand. Next we assume customer’s mindset and buying behavior etc.
finally, the investment community will consider market performance, replacement cost etc.

The model also assumes that three multipliers moderate the transfer between the marketing program
and the subsequent three value stages.

1- The program multiplier determines the marketing program’s ability to affect the customer
mind-set and is a function of the quality of the program investement.
2- The customer multiplier determines the extent to which value created in the minds of
customers affects market performance. This depends on competitive superiority, channel
and other intermediary support.
3- The market multiplier determines the extent to which the value shown by the market
performance of a brand in manifested in the shareholder value. It depends, in part , on the
actions of financial analysts and investors.

The two general approaches are complementary, and the marketers can employ both.

(1) A brand audit is a consumer-focused series of procedures to assess the health of the
brand,uncover its sources of brand equity, and suggest ways to improve and leverage its equity.
(2) Brand – tracking studies collect quantitative data from consumers over time to provide
consistent, baseline information about how brands and marketing programs are performing.

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WHAT IS A BRAND WORTH?

Its process follows five steps

(1) Market segmentation – the first step is to divide the market in which the brand is sold into
mutually exclusive segments that help determine variances in the brand’s different customer
groups.
(2) Financial analysis – intebrnd assess purchase price, volume and frequency to help calculate
accurate forecasts of future brand sakes and revenues.
(3) Role of branding – the role of branding assessment is based on market research, client word-
shops and interviews and represents the percentage of economic earnings the brand generates.
(4) Brand strength – interbrand then assesses the brand’s strength profile to determine the
likelihood that the brand will realize forecasted brand earnings. This step relies on competitive
benchmarking and a structured evaluation of the brand’s clarity , commitment and protection
etc. the stronger the brand, the lower the discount rate and vice versa.
(5) Brand value calculation – brand value is the net present value of the forecasted brand
earnings,discounted by brand discount rare.

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MANAGING BRAND EQUITY

BRAND REINFORCEMENT
marketers can reinforce brand equity by consistently conveying the brand’s meaning in terms of

1- What products it represents,what core benefits it supplies and what needs it satisfies
2- How the brand makes products superior and which strong, favorable and unique brand
associations should exist in consumer’s minds.

As an important part of reinforcing brands is providing consistent marketing support. Consistency

doesn’t mean uniformity with no changes : while there is a little need to deviate from a successful
position to maintain and develop different strategic points.

Marketers must recognize the trade-offs between activities that fortify the brand and reinforce its
meaning,such as a well-received product improvement etc.

At some point failure to reinforce the brand will diminish brand awareness and weaken brand image.

BRAND REVITALIZATION

The Brand Revitalization is the marketing strategy adopted when the product reaches the maturity
stage of product life cycle, and profits have fallen drastically. It is an attempt to bring the product back in
the market and secure the sources of equity i.e. customers.

Example: Mountain Dew, A Pepsi product, was launched in 1969 with the tagline “Yahoo Mountain
Dew” that flourished in the market till 1990. After that the sales of mountain dew declined due to which
it was re-positioned, its packaging was changed, and the tagline was changed to “Do the Dew”. It
targeted the young males showing their audacity in performing the adventurous sports. This led the
Mountain Dew to the fifth position in the beverage industry

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DEVSISING A BRANDING STRATEGY

a firm’s branding strategy- often called the brand architecture – reflects the number and nature of both
common and distinctive brand elements. Deciding how to brand new products is especially critical. A
firm has three main choices:

1- It can develop new brand elements for new products.

2- It can apply some of its existing brand elements.
3- It can use a combination of new and existing brand elements.

 Brand extension is the use of an established brand name for a new product or new product
category. It's sometimes known as brand stretching.
 Sub-branding is when a main brand creates a subsidiary or secondary brand. (For example, Diet
Coke or Nacho Cheese Doritos). Sub-brands are typically created as an opportunity to reach a
new audience
 A parent brand is an existing brand that gives rise to a brand extension by supporting the allied
products/services by sharing its brand identity.
 Brand extensions falls into two categories
1- In a line extension the parent brand covers a new product within a product category it
currently serves such as with new flavors.
 2- In a category extension , marketers use the parent brand to enter a different product
category, such as swiss army watches.
 Brand line is defined as offering of all the products under one brand name
 A Brand Mix, also referred as brand assortment, is the group of all of the brand lines by a seller
that are made available to the buyer for example: Unilever offers the brand Surf Excel in India
that initially was present in the detergent segment. Line Extensions were gradually introduced
line extensions with products like Surf Excel Easy Wash, Surf Excel Quick Wash, Surf Excel Matic
Top Load etc.
 Brand Variant means offering different versions of the same product which are different in
terms of price, flavour, quality, color, nutrients, etc. under the company's brand name. It can
leverage the brand popularity for diversification.
 Licensed Product : A product in which the licensee has been permitted to use the product/
brand is a licensed product. It could also mean licensing an intangible asset such as a brand.
CHAPTER : 10 CRAFTING THE BRAND POSITIONING

Although successfully positioning a new product in a well established market may seem difficult,Method
product shows that it is not impossible.

In this chapter, we outline a process by which marketers can uncover the most powerful brand
positioning

 All marketing strategy is built on segmentation , targeting , and positioning (STP)

 A company discovers different needs and groups in the market place, targets those it can satisfy
in a superior way than the other and then positions its offerings so the target market recognizes
the company’s distinctive offerings and images.
 Positioning Market positioning refers to the process of establishing the image or identity of a
brand or product so that consumers perceive it in a certain way.
 A good positioning has a foot in the present and a foot in the future.
 It needs to be somewhat aspirational so the brand has room to grow and improve.
 The real trick in positioning is to strike just the right balance between what the brand is and
what it could be.
 The result of positioning is the successful creation of a customer-focused value proposition, a
cogent reason why the target market should buy the product.
 Positioning requires that marketers define and communicate similarities and differences
between their brand and its competitors.
 Deciding on positioning requires
1- Determining a frame of reference by identifying the target market and relevant competition
2- Identifying the optimal points of parity and points of difference
3- Creating a brand mantra to summarize the positioning and essence of the brand.
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DETERMINING A COMPETITIVE FRAME OF REFERENCE
CFR defines which other brands a brand competes with and therefore which brand should be
the focus of competitive analysis.

If you run a furniture store, you probably compete with other furniture stores. If you run a tattoo parlor,
you are up against other tattoo parlors vying to attract the same customers as you.

Great brands can't be positioned in a vacuum; they must be positioned in context. The competitive
frame of reference provides the context for positioning, and it is a fancy way of describing the market or
context in which you choose to position your brand.

The furniture store and tattoo parlor are pretty cut-and-dried cases. But have you ever stopped and
wondered to yourself, "exactly which market am I in?" and realized that you are really competing in a
market or context that is not initially obvious?

 CFR are closely linked to target market decisions. Deciding to target a certain type of
consumer can define the nature of competition, because certain firms have decided to
target that segment in the past, or because consumers in that segment may already look
to certain products or brands in their purchase decisions.
 IDENTIFYING COMPETITORS

 Category membership : the products or sets of products with which a brand competes
and which function as close substitutes.
 firms should identify their competitive frame in the most advantageous way possible.
 We can examine competition from both an industry and a market point of view. An
industry is a group of firms offering a product or class of products that are close
substitutes for one another.
 Marketers classify industries according to number of sellers: degree of PD, presence or
absence of entry, mobility and degree of globalization etc
 Marketers must overcome ‘marketing myopia’ and stop defining competition in
traditional category and industry terms.

ANALYZING COMPETITORS

 A company needs to gather information about each competitor’s real and perceived strengths
and weaknesses.
 Based on analysis, marketers must formally define the competitive frame of reference to guide
positioning.
 In stable markets with little short-term change likeky,it may be fairly easy to define one two or
perhaps three competitors. In dynamic categories where competition may exist or arise in a
variety of different forms, multiple frames of reference may arise

IDENTIFYING OPTIMAL POINTS-OF-DIFFERENCE AND POINTS OF PARITY

Once marketers have fixed the CFR for postioning by defining the customer target market and
the nature of the competition, they can define what is POD and POP
POINTS OF DIFFERENCE
 Are the attributes or benefits that the consumers strongly associate with a brand,
positively evaluate and believe they could not find in the other brand.
 Associations could be based on any attribute or benefit.
 creating strong,favorable and unique associations is the real challenge but is an essential
one for competitive brand positioning
 three criteria determine whether a brand association can truly function as a
POD,desireability and differentiability. Some key considerations are
1. desirable to consumer. They should see brand association as personally
relevant to them. Consumers may also be given a compelling reason to believe
and an understandable rationale for why the brand can deliver the desired
benefit.
2. Deliverable by the company. The company must have the internal resources
and commitment to feasibly and profitably create and maintain the brand
association in the minds of consumers. The product design and marketing
must support the desired association.
3. Differentiating from competitors. Finally consumers must see the brand
association as distinctive and superior to relevant competitors.

Any attribute or benefit associated with a product or service can function as a POD
for a brand as long as it is sufficiently desirable deliverable and differentiating.
Consumers must be convinced for example, LOIUS VUITTON has the most stylish
 bags, energizer is the longest lasting battery and fidelity investments offers the
best financial advice and planning.

POINTS OF PARITY

 Points of parity on the other hand are attribute or benefit associations that are not necessarily
unique to the brand but may in fact be shared with other brands.
 These types of associations come in two basic forms : category and competitive
 Category points of parity are attributes or benefits that consumers view as essential to a
legitimate and credible offering within a certain product or service category. In other words,
they represent necessary but not sufficient conditions for brand choice. Customers wont be
considering a travel agency a travel agency unless it is able to make air and hotel reservations,
provide advices etc.
 Competitive points of parity are associations designed to overcome perceived weaknesses of
the brand. It maybe required to either (a) negate competitors perceived POD or (b) negate a
perceived vulnerability of the brand as a result of its own POD.
 POP VS POD
For an offering to achieve a POP on a particular attribute or benefit, sufficient number of
consumers must believe the brand is good enough on that dimension. There is a zone or range
of tolerance or acceptance with POP. The brand does not literally need to be seen as equal to
competitors but consumers must feel it does well enough on that particular attribute or benefit.

MULTIPLE FRAME OF REFERENCE

 In marketing, "frame of reference" is how a new product, service, or concept is seen by the
target market. (Morelo, n.d.). This creates a specific picture or idea about or surrounding a
product, service, or concept being marketed.

For example starbuks could define very distinct sets of competitors suggesting different possible POPS
and PODs

STRADDLE POSTIONING a company will straddle two frames of reference with one set of points of
difference and points of parity. In these cases, the points of difference for one category become points
of parity for the other and vice versa.

 Subway restaurants are positioned as offering healthy, good tasting sandwiches.

 This positioning allows the brand to create a POP on taste and POD on health with respect to
quick serve restaurants.
 Another example of straddle positioning is BMW
 Although a straddle positioning is often attractive as a means of reconciling potentially
conflicting consume goals and creating a best of both worlds solution. It also carries an extra
burden.
 If POD and POP are not credible the brand may not be viewed as a legitimate player in either
category.

CHOOSING POPs and PODs

 Marketers typically focus on brand benefits in choosing the POP and POD that make up their
brand positioning.
  Markters of dove soap for example, will talk about hw its attributes of one quarter cleansing
cream uniquely creates the benefits of softer skin.
 For choosing specific benefits as POPs and PODs to position a brand, perceptual maps maybe
useful.
 Perceptual maps are visual representations of consumer perceptions and preferences.
 they provide quantitative portrayal of market situations and the way consumers view different
products, services and brands along various dimensions.

BRAND MANTRAS

 it is the articulation of the heart and sould of the brand and is closely related to other branding
concepts like ‘ brand essence’ and core brand promise.
 BMs are short, three to five word phrases that capture the irrefutable essence or spirit of the
brand positioning.
 Their purpose is to ensure that all the employees within the organization and all external
marketing partners understand what the brand is most funadementally to represent with
consumers so they can adjust their actions accordingly.
 Brand mantras are powerful devices
 They can provide guidance about what products to introduce under the brand and what ad
campaigns to run and where to sell the brand.
 In effect, they create a mental filter to screen out brand inappropriate marketing activities or
actions of any type that may have a negative bearing on customer’s impressions of brand.

DESIGNING A BRAND MANTRA

 Brand mantras are designed with the internal purposes in mind.a brand slogan is an external
translation that attempts to creatively engage customers.
 The three key criteria of a brand mantra
1- Communicate. A good brand mantra should define the category of business for the
brand and set the brand boundries. It should also clarify what is unique about the brand.
2- SIMPLIFY. An effective brand mantra should be memorable.
3- INSPIRE. Ideally the brand mantra should also stake out ground that is personally
meaningful and relevant to as many employees as possible.

ESTABLISHING BRAND POSITONING

Establishing the brand positioning in the marketplace requires that consumers understand what the
brand offers and what makes it a superior competitive choice.

 There are also situations in which consumers know a brands category membership but maynot
be convinced the brand is a valid member of the category.
 Brands are sometimes affiliated with categories in which they do not hold membership. This
approach is one way to highlight a brand’s POD, providing consumers know the brand’s actual
membership.
COMMUNICATING CATEGORY MEMBERSHIP
 Three main ways to convey a brand’s category membership.
 1- Announcing category benefits. To reassure consumers that a brand will deliver on
the fundamental reason for using a category, marketers frequently use benefits to
announce category membership.
2- Comparing to exemplar. Well known , noteworthy brands ina category can also
help a brand specify its category membership.
3- Replying on the product descriptor. the product descriptor follows the brand name
is often a concise means of conveying category origin.

COMMUNICATING POPs AND PODs

Pops and pods at times are very negatively correlated which makes the competitive brand positioning
very difficult at times. For example , it might be difficult to position a brand as inexpensive and at the
time asset that it is of the highest quality.
more examples : powerful vs safe, nutritious vs good tasting

 Consumers typically want to maximize both negatively correlated attributes or benefits.

 Dealing with most of the trade offs in marketing is no different than positioning
 Marketers adopt other approaches to address attribute or benefit trade offs: launching
two different marketing campaigns. Each one devoted to a different brand attribute.

DIFFERENTIATION STRATEGIES

 Differentiation strategy, as the name suggests, is the strategy that aims to distinguish a product
or service, from other similar products, offered by the competitors in the market. ... In this way,
the firm succeeds in creating a unique image in the market and gets the premium price for its
uniqueness
 A competitive advantage is an advantage over competitors gained by offering consumers
greater value, either by means of lower prices or by providing greater benefits and service that
justifies higher prices
 A leveragable advantage uses a springboard to new advantages , much as microsoft has
leveraged its operating system to Microsoft office and then to networking applications.
 Customers see competitive advantage as customer advantage.
 Companies must also focus on building customer advantages. Then they will deliver high
customer value and satisfaction, which leads to high repeat purchases and ultimately to high
company profitability.

MEANS OF DIFFERENTIATION

 Consider these other dimensions, among the many that a company can use to differentiate its
market offerings :
1- Employee differentiation. Companies can have better trained employees who provide
superior customer service.
2- channel differentiation. Companies can more effectively design their distribution channel’s
coverage, expertise and performance to make buying the product easier and more
enjoyable and rewarding
3- image differentiation. Companies can craft powerful, compelling images that appeal to
consumer’s social and psychological needs.
 4- Service differentiation. A service company can differentiate itself by designing a better and
faster delivery system that provides more effective and efficient solutions to consumers.
There are three levels of differentiation. The first is reliability. The second is resilience. The
third is innovativeness

EMOTIONAL BRANDING

 Brand positioning should have both rational and emotional components.

 A good positioning should contain points of difference and points of parity that appeal both the
head and heart.
 Strong brands often seek to build on their performance advantages to strike an emotional chord
with their customers.
 A person’s emotional response to a brand and its marketing will depend on my factors.
 One increasingly important factor is a brand authenticity.
 Guinness celebrated its heritage, quality and authenticity with a 250th anniversary marketing
campaign whose ads depict consumers all over the world toasting the brand.
 Brand consultant believes emotional brand share three specific traits.
1- A distinctive communication style and philosophy
2- Strong people focused corporate culture
3- A compelling emotional book
 Saatchi & Saatchi CEO Kevin advocates that brands strive to become lovemarks. Brands that are
lovemarks, according to Roberts, command both respect and love result from a brand’s ability
to achieve mystery, sensuality and intimacy
1- Mystery draws together stories,metaphors dreams and symbols. It adds to complexity of
relationships and experiences because people are naturally drawn to what they don’t know.
2- Sensuality keeps the five senses on constant alert for new textures and sensory stimuli
3- Intimacy means empathy, commitment and passion. The close connections that win intense
loyalty as well as the small perfect gesture.
 In general the firm should monitor three variables when analyzing potential threats posed by
competitors :
1- Share of market - share of target market
2- Share of mind – percentage of customers who named the competitor in responding to the
statement ‘ name the st company that comes to your mind in this industry’
3- Share of heart – the percentage of customers who named the competitor in responding to
statement ‘ name the company from which you would prefer to buy the product’

ALTERNATIVE APPROACHES TO POSITIONING

BRAND NARRATIVES AND STORYTELLING marketers describe positioning a brand as telling a narrative
or story.

Randel ringer and Michael see narrative bonding as based on deep metaphonrs that connect to people’s
memories,associations and stories.

Five elements of narrative branding

1- Brand story : words and metaphors

2- Consumer journey : touch points
3- Language : visual and expressions.
 4- Way/manner : narrative is expressed experimentally
5- Role : relationship a brand plays

Based on literary convention and brand experience , they also offer the following framework for a brand
story:

 Setting . the time, place and context

 Cast. the brand as a character,history creation etc
 Narrative arc. narrative logic unfolds over time, including actions, desired experiences, defining
events and the moment of epiphany.
 Language. the authenticating voice, metaphors, symbols , themes and letimotifs.

BRAND JOURNALISM

Is a chronicle of the varied things that happen in our brand world, throughout our day, throughout
the years.

 Our brand means different things to different people.

 It doesn’t have one brand position.
 No one communication alone tells the whole brand story.
 Each communication provides a different insight into our brand.

CULTURAL BRANDING

Cultural branding is a discipline that systematically guides brand innovation: we

pinpoint cultural opportunities emerging in society and build brand strategies to leverage these
opportunities

POSTIONING AND BRANDING A SMALL BUSINESS.

 Building brands for a small business is a challenge because these firms limited resources and
budgets.
 Some specific banding guidelines for small businesses are as follows.
1- Creatively conduct low cost marketing research. There are a variety of low-cost marketing
research methods that help small businesses connect with customers and study
comparisons.
2- Focus on building one or two strong based on one or two key associations. Small
businesses often must rely on only one or two brands and key associations as points of
difference for those brands.
3- Employ a well-integrated set of brands elements. Tactically, it is important for small
businesses to maximize the contribution of each of the three main sets of brand equity
drivers. First, they should develop a distinctive , well integrated set of brands elements that
enhances both brand elements that enhances both brand awareness and brand image.
4- Create buzz and a loyal brand community. Because small businesses often must rely on
word of mouth to establish their postioning, public relations, social networking, and low
cost promotions and sponsorship can be inexpensive alternatives.
5- Leverage as many secondary associations as possible. Secondary associations – any
person’s places or things with potentially relevant associations are often cost-effective,
shortcut means to build brand equity especially those that help to signal quality or
credibility.

………………………………………………………………………………………..

CHAPTER 11 competitive advantage

A market leader has the largest share and usually leads in price changes, new product
introductions, distributions coverage and promotional intensity.

Example : Microsoft , McDonald’s

 in many industries, a discount competitor has undercut the leader’s prices.

 Marketing insight: when your competitor delivers more for less, describes how leaders
can respond to an aggressive competitive price discount.
 To stay no one, the firm must find ways to expand total market demand. Second, itmust
protect its current sharethrough good defensive and offensive actions. Third it should
increase market share even if market size remains constant.

STRATEGIES TO STAY ON TOP/MARKET LEADING

1- EXPANDING TOTAL MARKET DEMAND

When total market expands, the dominant firm usually gains the most. The
market leader should look for new customers or more usage from existing
customers.
New customers. Every product class has the potential to attract buying who
are unaware of the product or are resisting it because of price or lack of certain
features.
A company can search for new users among three groups : those who might
use it but do not ( market penetration strategy)
Those who never used it ( new market segment strategy)
Those who live elsewhere ( geographical expansion strategy)
More usage. Marketers can try to increase the amount, level or frequency of
consumption. They can boost amount through packaging or product redesign.
Increasing frequency of consumption , on the other hand, requires either
identifying additional opportunities to use brand in the same basic way or
identifying completely new and different ways to use the brand.
Additional opportunities to use the brand. A marketing program can
coxzmmunicate the appropriateness and advantages of using the brand.
Opportunity : consumer perception of their usage differs from reality.
Strategy : tie the act of replacing the product to a holiday, event or time of the
year.
To provide consumers with better information of why they need to use the
product or replace it.
Ne w ways to use the brand.
  Increase frequency of consumption (to identify completely new and
different applications)
 Food product companies have long advertised recipes that use their
branded products in different ways.
2- PROTECTING MARKET SHARE
The dominant firm must actively defend its current business.
Proactive marketing.
Proactive marketing is a form of marketing that allows for marketers to be
agile, real-time, data-driven, and adaptable to the ever-changing space of what
their customers could be seeking
Draw distinction between responsive marketing,anticipative marketing, and
creative marketing.
A responsive marketer finds a stated need and fills it.
An anticipative marketer looks ahead to needs customers may have in the near
future.
A creative marketer discovers solutions customer did not ask for but to which
they enthusiastically respond.
A company needs two proactive skills
1- Responsive anticipation
2- Creative anticipation

Proactive firms

Are ready to take risks and make mistakes

Have a vision of the future of investing in it

Have the capabilities to innovate

Are flexible and nonbureaucratic

Have many managers who think proactively

Defensive marketing

The aim of DM is to reduce the probability of attack, divert attacks to less threatened areas, and lessen
their intensity.

A dominant firm can use the six defense strategies

i. Position Defense:
The most basic defense strategy is to build an impregnable (indestructible, unconquerable, or
unbeatable) fortification (protecting fort) around one’s territory to keep the opponents away. It involves
continuous innovation, diversification, price-cuts, improving distribution, and strengthening promotional
efforts.

ii. Flank Defense:

Here, the purpose is to protect weak sides or fronts. Flank defense consists of erecting/setting outposts
to protect weak fronts that are vulnerable to be attacked. Such protection attempts serve as invasion
base for counterattack, if needed. Quality improvement, introduction of low-price products, aggressive
sales force, etc., can make sense.

iii. Preemptive or Preventive Defense:

The basic idea of preemptive defense is to launch the attack before the enemy starts attacking. It is like:
To attack the enemy earlier to avoid enemy’s attack. Playing the psychological games is very common to
discourage competitors’ maneuver (movement).

The company leaks the news by any of the media that it is considering to cut price and/or planning to
build another plant. Such news intimidate (threaten) the competitors who decide to cut price or enter
the market with the existing or new product.

iv. Counteroffensive Defense:

Counteroffensive indicates responding enemy’s attack with a counterattack. The leader cannot remain
passive when competitor’s attacks in forms of price-cut, product modification, promotion blitz
(bombardment), or any time of invasion on its sales territories. Leader firm has to undertake frontal, i.e.,
head-on attack in case of rapid erosion of market share.

When market leader’s territory is attacked, an effective counter attack is to invade the enemy’s
territories so that it has to pull back some of its troops (resources) to defend the territories. Sometimes,
leader exercises economical or political clout (influence, blow, or power) to discourage the attackers.

Economical clout includes applying further price- cut or may announce product up-gradation to delay
customers buying the competitors’ products while political clout includes lobbing legislators to take
political actions to hamper or slow down the enemy.

v. Mobile Defense:
Mobile defense – also called shifting defense – is much more than simply protecting the territories. The
leader stretches or expands its domain (area) over new territories that can serve as the future centers
for offense as well as defense. A leader will deploy its resources in such a way to avoid the future
invasion and create an impression in mind of competitors that leader is capable to safeguard its
territories.

There are two approaches to mobile defense:

a. Market Broadening:
It involves shifting firm’s focus from the current product to forthcoming new technology and
concentrating more on research and development activities. However, too much focus on the future at
the expense of the present is not advisable. Company must maintain its strengths today to fight in the
future. It must go for reasonable broadening.

b. Market Diversification:
Market diversification calls upon moving quickly into unrelated industries to strengthen its position.

vi. Contraction Defense:

Sometimes, even large companies can no longer defend all territories. The best strategy in this situation
is a planned contraction, i.e., strategic withdrawal. Planned contraction doesn’t mean market
abandonment (fleeing from the market), but rather giving up weaker territories and concentrating on
stronger territories.

………………………………………………………………………..

3. Expanding Market Share:

Instead of expanding total market and defending current market shares, sometimes, the market leader
prefers to improve profitability by increasing market share. The extent to which the increased market
share results into improved profitability depends on a lot of variables. Here, company must do
something to snatch the market share from the pockets of competitors.

There are several ways to expand market share:

i. Adding New Product Lines:
In order to expand market share, the market leader can add new and diversified product lines to make
the product mix comprehensive and attractive. However, there must be adequate demand for new
product lines.

ii. Expanding Existing Product Lines:

It is a product line extension strategy. It calls upon expanding current product lines by adding new
models, varieties or items with attractive features (colours, sizes, shapes, weights, get-ups, etc.) and
superior qualities (durability, taste, usefulness, safety, convenience, status, etc.) This strategy can attract
more customers. Research and development department must be active to grab emerging market
opportunities.

iii. Improving Product Qualities:

Market share can be increased by improving qualities of current products so that customers expecting
better qualities can be attracted.

iv. Increasing Promotion Efforts:

Heavy advertising, aggressive sales force, effective sales promotion, and attractive publicity efforts can
help expanding market share faster relative to competitors.

v. Improving Distribution System:

Market share can be expanded via better distribution system. Both direct and indirect channels and
overall physical distribution system must be modified so that customers can avail the products with the
least difficulties. Similarly, effective distribution system can bring down overall selling costs which can
further improve profitability.

vi. Deploying Aggressive Sale Force:

Effective personal selling efforts also have positive impact on sales volume, market share, and
profitability as well.

vii. Applying Price-cut:

To attract price-sensitive customers, leader can practice price-cut strategy. This strategy is profitable
only when the per cent of sales-rise is more than per cent of price-cut.

viii. Improving Production Efficiency:

A leader must improve production efficiency to reduce overall costs. Due to improved production
efficiency, a firm can sell better-quality products even at low price.

Marketing Strategies for Market Challengers:

Market challengers are known as runner-up firms. They occupy second, third and lower ranks in an
industry. Bajaj Auto in two-wheelers, Tata Motors and Hyundai in cars, Reliance Petro and Essar Oils in
refineries, Pepsi-Cola in soft-drink, Procter and Gamble in consumer packaged goods, Vodafone in
cellular service providers, Sony and Samsung in cell-phone instruments, etc., are some of the market
challengers in India.

Market challengers are capable to attack the leader and other competitors. Sometimes, capable
challengers can overtake the leader, too. Let us examine three-staged marketing strategies available to
market challengers. Figure 4 shows the market challengers’ three-stage marketing strategies.

Strategies:
The challenger can exercise following strategies:
1. Defining Strategic Objectives and Opponents:
First of all, a market challenger firm must define its strategic objectives. Normally, most of market
challengers’ strategic objective is to increase market share. Then, the challenger has to decide on the
opponents to attack. Like market leaders, the challengers cannot fight against all opponents. Therefore,
a challenger firm has to select the specific opponent to attack.

A market challenger can attack any of the following opponents:

i. Attacking the market leader.
ii. Attacking the firms of its own size that are not doing the job well and are underfinanced.

iii. Attacking the small local and regional firms that are not doing the job well and are underfinanced.

2. Choosing General Attack Strategies:

Once strategic objectives are defined and opponents are selected, the challenger can apply following
attacking options:
i. Frontal Attack:
A frontal or “head-on” attack is an aggressive attack strategy. A challenger attacks the opponent’s
strengths rather than its weaknesses. The outcomes depend on who has more strengths and endurance.
This option is preferred by the firm with greater resources, otherwise it is proved as a suicide mission.

Frontal attack involves attacking opponent’s products, advertising and pricing, and lowering production
costs with heavy investment, etc. IBM’s attack on Microsoft is the best example of frontal attack. This
attacking option is widely practices in Banking, insurance, cell-phones, airways, etc.

ii. Flank Attack:

The challenger concentrates on opponent’s less-secured, rear-side or weak spots to attack. It is a side-
attack rather than a front attack strategy. This option is particularly attractive to an aggressor with less
resources than opponents. There are two strategic dimensions of a flank attack – geographical and
segmental.

In geographical attack, the challenger spots (locates) areas where the opponent is underperforming.
And, in segmental attack, a challenger spots the markets, which are not served by the leaders. The firm
tries to fill the gap by finding needs and satisfying them. Naturally, flank attacks are more likely to be
successful than the frontal attacks.

iii. Encirclement (All-round) Attack:

Encirclement attack is a form of all-rounded and comprehensive attack. It involves launching a grand
offensive attack on several fronts, so that the opponent must protect its fronts, sides, and rears
simultaneously.

The challenger may offer the market everything the opponent offers. This attack is meaningful only
when the aggressor commands superior resources and firmly believes that such attack will break the
opponent’s will.

iv. Bypass Attack:

It is the most indirect attacking option to harm others. It indicates bypassing (i.e., ignoring or avoiding)
the enemy and attacking easier markets to broaden one’s resource base. This is the easiest way to face
the leader.

There are three approaches:

a. Diversifying into Unrelated Products:
It involves producing and introducing unrelated product to avoid direct confrontation.

b. Diversifying into New Geographical Markets:

It involves launching the products in such areas where competitors are absent.
c. Leapfrogging into New Technologies to Replace Existing Products:
It involves researching and developing patiently new technologies and launching an attack with superior
products.

v. Guerrilla Attack:
This type of warfare contains making small and intermittent (sudden and irregular) attacks on enemy’s
different territories. A firm may undertake a few major attacks or continuous minor attacks for longer
time. It is more preparation for war than war itself.

Ultimately, the guerrilla attack must be backed by a stronger attack to beat the opponent. It is also
expensive and requires a good deal of resources. However, it is less expensive compared to other
attacks. The purpose of such attack is to confuse, harass and demoralize opponents, and finally make
permanent place in the market. Guerrilla attacks include selective price cuts, intense promotional
efforts, more attractive service offers, occasional legal actions, etc. Normally, such attacks are practiced
by smaller firms against lager firms.

3. Choosing Specific Attack Strategies or Attacking Tools:

The five main attack strategies – frontal attack, flank attack, encirclement attack, bypass attack, and
guerrilla attack – are very broad.

These strategies consist of many specific attack strategies, some of them have been described as
under:
i. Price-Discount Strategy:
It consists of offering a comparable product at a lower price. Success of price-discount strategy works
successfully if (1) the challenger can convince that products and services are comparable to that of
leaders, (2) buyers must be price- sensitive and feel comfortable to buy, and (3) market leader must not
cut its price in spite of challenger’s attack.

ii. Cheaper-good Strategy:

It consists of offering average or low quality products at much lower price. The strategy works
successfully only when there are sufficient number buyers who are interested in the low-priced and low-
quality products.

iii. Prestige-good Strategy:

It consists of launching the high quality products and selling them at premium price. This strategy
succeeds if specific group of buyers are ready to pay high price for superior quality-prestigious products.

iv. Product-proliferation Strategy:

It consists of attacking leader by launching a large number of product varieties to give buyers more
choice.

v. Product-innovation Strategy:
It consists of adopting product innovation to attack leaders’ position.

vi. Improved-services Strategy:

It consists of offering the customers new and better services with same products. Such strategy is widely
practiced in consumer durables.
vii. Distribution-innovation Strategy:
It consists of attacking leaders by discovering new ways or channels of distribution. A challenger can
apply door-to-door selling, online selling, direct selling, opening stores at convenient places, etc., instead
of tradition way of distribution.

viii. Manufacturing-cost-reduction Strategy:

It consists of reducing manufacturing costs by more efficient purchasing, lower labour costs, modern
production equipment, and improved technology. The market challenger can apply lower cost to
aggressive pricing.

ix. Intensive Advertising and Promotion:

It consists attacking the leader by increasing advertising and promotional expenditures. The success of
the strategy depends on how far challenger can exhibit superiority over the leader.

Marketing Strategies for Market Followers:

The firms prefer to follow leader rather than to challenge are called the followers. They do not face the
leader directly. Some followers are capable to challenge but they prefer to follow. However, market
followers always react strongly in case of any loss.

In some capital goods industries like steel, cement, chemical, fertilizer, etc., product differentiation is
low, service qualities are similar, and price sensitivity is high. They decide to provide similar offers by
copying the market leader. But, one must be aware that followership is not always rewarding path to
pursue.

Market followers prefer to follow the leader doesn’t mean that they don’t require specific market
strategies. They cannot be simply passive or a carbon copy of leaders. They must know how to hold
current customers and win a fair share of new customers. Followers must keep manufacturing cost low
and offer better quality products with satisfactory services. At the same time, they must enter new
markets as and when there are opportunities.

They have following strategic options:

1. Counterfeiter or Fraudster:
It is a simple way to follow the leader. The follower who wants to be counterfeiter duplicates the
leader’s product as well as package and sells it in the market through disrepute distributors. Products
are marketed secretly to avoid legal complications.

The product seems exactly similar to original product except basic quality and features. This is common
strategy in auto-parts and electronics products. People, knowingly or unknowingly, buy such duplicate
products as they are made available at low price.

2. Cloner or Emulator:
The doner clones (emulates) the leader’s products, distribution, advertising and other aspects. Here,
product and packaging may be identical that of leader, but brand name is slightly different, such as
“Colgete” or “Colege” instead of “Colgate” and “Coka-Cola” instead of “Coca-cola.” This strategy is
widely practiced in computer business also. The cloned products are openly sold in the market due to
different brand names.
3. Imitator:
Some followers prefer to imitate/copy some aspects from the leader, but maintain differentiation in
terms of packaging, advertising, sales promotion, distribution, pricing, services, and so forth. Customers
can easily distinguish imitated product from original one. The leader doesn’t care for imitator until
imitator attack the leader aggressively. Quite obviously, such products are sold at low price.

4. Adaptor:
Some followers prefer to adapt the leader’s products and improve them. They make necessary
changes/improvements in the original products and develop little different products. The adapter may
choose to sell the products in different markets (country or area) to avoid direct confrontation with the
leader. Many Japanese companies have practiced this strategy and developed superior products.
Followers can earn more as they do not bear innovation expenses. In the same way, they can conserve
advertising and other promotional expenses. However, to be follower of a leader is not always better
option to pursue.

Marketing Strategies for Market Nichers (Tiny Firms):

A niche is a more narrowly defined small market (limited number of buyers) whose needs are not being
well-served by existing sellers. It is a small segment that has distinctive needs and is, mostly, ready to
pay high price. Marketers can identify niches by dividing a segment into sub-segments or by dividing a
group with a distinctive set of traits.

They may seek a special combination of benefits. Niches (small groups of buyers) are fairly small and
normally attract a few competing firms (nichers). A nicher is the small firm serving only small specific
groups of customers called as the niches. The firm’s marketing efforts to serve the niches successfully is
called nichemanship.

Nichers understand their niches’ needs so well and minutely that their customers are willing to pay a
premium price. They design special products with distinctive features, qualities, uses, and value for
special group of limited customers. They have the special skills to serve the niches in a superior fashion
and can gain certain economies through specialization.

For example, a footwear company can create niches by designing shoes for different sports (like crickets,
hokey, athletes, golf, etc.), 3nd exercises (like cycling, running, jogging, waking, etc). In the same way,
niches can be created in hotels, cosmetics, cloths, airways, hospitals, and others. Nichers can gain
comparatively high returns. They can achieve high margin while large companies can achieve high
volume.

Smaller firms normally avoid competing with larger firms by targeting small markets in which large firms
have a little or no interest. Companies with low market shares can be highly profitable through effective
niching. Nichers have to perform three main tasks – creating niches, expanding niches, and protecting
niches. They have to remain alert for all the time as they can be invaded any time by the large
competitors.

Strategies:
Specialization is the basic idea to serve niches. Nichers can apply specialization on various aspects.

They can practice one or more of following marketing strategies:

1. End-user Specialist:
It is very popular and widely used option to serve niches. The firm prefers to operate one-type of end-
use customers, for example, a legal advisory firm can handle only criminal cases, or a fashion designer
can work only for a few film stars.

2. Vertical Level Specialist:

The firm can specialize at vertical level of production or distribution, for example, producing only raw-
materials for specific companies, only warehousing services, or it may concentrate only on retailing. It
can serve only a part of the total process.

3. Customer Size Specialist:

The firm can sell products only to small, medium, or large size customers. For example, a firm can supply
one or two components only to large companies.

4. Specific Customer Specialist:

A firm supplies its products only to distinct group of buyers. For example, designing special two-wheeler
for handicapped people or serving special foods to people who are suffering from certain diseases like
diabetes.

5. Geographic Specialist:
The firm serves customers of only specific region or area of the world, for example, specific need of the
people living in the hilly area.

6. Product or Product Line Specialist:

The firm produces or sells only one product or product line, for example, it sells only socks, ties, or tie
pins. A small finance company deals with only car loans or personal loans.

7. Event Specialist:
The firm concentrates its efforts only on particular events or occasions like marriage, grand
inauguration, birthday, anniversary, or some festivals. It offers goods or services for celebrating the
events of target buyers.
CHAPTER 12 : SETTING PRODUCT STRATEGY

PRODUCT CHARACTERISTICS AND CLASSIFICATIONS

 Product is anything that can be offered to a market to satisfy a want or need, including physical
goods, services, experiences, events , persons , places, properties and ideas

PRODUCT LEVELS : THE CUSTOMER – VALUE STRATEGY

5 products levels

Each level adds more customer value, and five build up customer value hierarchy

 Core benefit : the service or benefit the customer is really buying. A hotel guest is buying rest
and sleep.
 Basic product : here the marketer turns the core benefit into a basic product. Thus a hotel
rooms includes a bed,bathroom and other facilities.
 Expected product : here the marketer prepares an expect product. A set of attributes a buyer
must be expecting producer to provide at the time of purchasing. Hotel guests usually expects
fresh towels, toiletries and closet etc
 Augmented product : here the marketer prepares the product that exceeds customers
expectations. This sort of brand positioning mostly happens in developed countries.
 Potential product : surrounds all the possible augmentations and transformations the product
or offering might undergo in the future.
C-B-E-A-P ( cabe-ap)
usually what happens is that differentiation occurs on the basis of product augmentation which ends
up the marketer to look at the total consumption system : the way a user performs the tasks of
getting and using products and related services.

Augmentation adds cost – later becomes expected benefits and essential points of parity.

Product classifications

Marketers classify products on the basis of durability, tangibility and use ( consumer or industrial )

 Durability and tangibility

1- Nondurable : tangible goods. A few users. Frequently bought. Appropriate strategy :
make them available. Advertise heavily to induce trial and build preference
2- Durable goods : tangible. Survive many years. Requires more personal selling and service.
3- Services : intangible. Inseparable. Perishable product. Requires more quality control and
adaptability. Example : haircuts.
 Consumer goods classification
classify on consumer habits.
1- Convenience goods. Bought by consumers frequently with minimal effort. STAPLES are
suchgoods becayse they are being bought on daily basis. IMPULSE GOODS – purchased
by without any plans. EMERGENCY GOODS – a need is urgent.
 2- Shopping goods. Consumer compares on bases as suitability,quality price and style.
Example : furniture , clothing etc
3- Specialty goods. Have some uniqueness is why consumer wants to buy it as a special
purchase. Examples : cars
4- Unsought goods. Doesn’t really know about ( consumers) . example : smoke detectors ,
life insurance etc
 Industrial goods classification. Classify them in terms of their relative cost. Materials and
parts.

1- Raw materials and manufactured materials.

2- Capital items. Long lasting goods. Installations and equipment. Buildings etc.
3- Supplies and business services. Short term goods. Maintenance and repair items.

PRODUCT AND SERVICES DIFFERENTIATION

 Product differentiation
1- FORM – the size shape or physical structure of a product.
2- FEATURES – varying features that supplement their basic function. A company can add
up new features to gain customer value. Thinking how many would like to have that
feature , how long will it take etc.
3- CUSTOMIZATION mass customization is the ability of a company to meet each criteria
and prepare it.
4- PERFORMANCE QUALITY levels – low, high, average or superior. On basis of performance
, customers will judge the company. Whether theyre continuously improving or what.
5- CONFORMANCE QUALITY buyers expect high conformance quality. Degree to which all
produced units are identical and meet promised specifications.
6- DURABILITY customers would see how durable a product is. And if a product provides
you durability it must no excessively exceed the price.
7- RELIABILITY measure of the probability that a product will not malfunction or fail.
8- REPAIRABILITY measures the ease of fixing a peoduct. – diagnostic features etc
9- STYLE describes the product’s look and feel to the buyer. Creates distinctiveness that is
hard to copy.
 Service differentiation
If a product can not be easily differentiated , the key is to add value through services and
improved quality. Giving a wide span for customers to judge.
1- Ordering ease refers to how easy it is for customers to place an order with the company.
2- Delivery how well the product or service is brought to the customer. It includes
speed,accuracy and care throughout the process.
3- Installation refers to the work done to make a product operational in its planned
location.
4- Customer training helps the customer’s employees use the vendor’s equipment properly
and efficiently.
5- Customer consulting includes data , information systems and advice services the seller
offers to buyers.
6- Maintenance and repair programs help customers keep purchased products in good
working order.
 7- Returns a nuisance to customers, manufacturers, retailers and distributors alike, product
returns are also an unavoidable reality of doing business especially with online
purchases.

DESIGN

The totality of features that effect how a product looks, feels, and functions to a consumer.

Functional and aesthetic benefits.