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Brand Management

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Brand Management (MKT624)
VU
Lesson 16
BRAND BASED CUSTOMER MODEL
We continue with our discussion on comparisons with competition to asses our brand and
develop a customer oriented model.
Question 3
This question (opportunities for growth and expansion) demands clarity of the following two
factors:
·  What are customers' beliefs about the segment and the category?
·  What unmet needs are there, which can be addressed?
Since we are attempting to learn how to come up with a brand-based customer model, the focus
of this question remains customers' perspective and not company's own. You have to make an
effort to unearth how customers feel about benefits and values that must be offered by brands
within the category.
As an example, a telephone company (a private sector company) may find out from customers
that they (customers) will like to have telephone and internet facility through the same line
without disturbance of one by the other.
Another example could be that of an internet service provider (ISP) to start offering wireless
internet services to fulfill customers' need for a trouble- and frequency-distortion free
connection only after having been in contact with its customers.
The key to understanding customers' perspective is to stay in contact with them, either through
structured research or informal contact. A Japanese company follows as a regular practice their
senior managers' contact with Japanese families through pre-arranged appointments. The
executives talk with the families to find out their comments on the needs that still remain unmet
or the ones that have sprung up merely due to circumstantial evolution1. They seize the
opportunity and give a solution to customers. They know that they cannot stay the course too
long. Competition will jump in and occupy the slot that very naturally could have been theirs.
The clarity on the two factors is a prerequisite to understanding to what extent are there
opportunities to expand? An in-depth analysis will lead to some blank areas in terms of
customers' beliefs. Even if the company managers are sensitive to fulfill unmet needs owing to
their knowledge of the market, knowing customers' point of view will only strengthen
managers' strategic thoughts and planned moves.
Summary ­ brand-based customer model, lecture 14 through here
A brand-based customer model is all about creating, maintaining, and leveraging your brand by
keeping the focus on customers. We have to stay close to the customer and make the customer
the basis of all branding decisions.
Seek customers' perspective of competitors' products as well and have formal and informal
ways and means to assess your brand as it stands in the competitive setup. In other words,
understand your brand vis-ŕ-vis competition to make realistic decisions about sustaining your
brand. Keep you brand current and contemporary through innovations and maintain the
pinnacle of the brand value pyramid.
Understand the category from customers' point of view and identify all those needs that are still
unmet. That will give you leads into expanding and growing your business. If you go slowly,
then competition will not waste a moment to take over.
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Brand Management (MKT624)
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POSITIONING
An understanding of the category and the roles played by competition (all brands) leads us to
develop the positioning for our brand. Positioning is very central to having the right strategies
at work to achieve our brand management and overall business goals.
Positioning is an approach to communication that solves communication problem by
highlighting very special features of your brand. It is important to understand why and how it
started?
Product era
It started in the middle of the last century, in fifties. Back then, it was the product era. New
technologies were emerging and subsequent innovations led to emergence of a host of new
products and their variations. Advertisers and advertising agents thought it prudent to talk about
the differentiated features of their products in a fairly straightforward manner. Consumers saw
the difference and advertising made its mark. This was the time of unique selling proposition -
USP. Talking about the USP is not discarded even today. However, the objective here is to
have the historical perspective right.
With technology reaching a high level across so many categories and boundaries, level of
innovations decreased while communication remained at its peak. The net result was that
everyone was talking about almost the same thing because there were a lot of "me-too"
products and that marked the end of an era ­ "the product era1"
Image Era
Advertising experts thought of changing the strategy to revitalize advertising and that marked
the beginning of an era known as "the image era". The general thinking was ­ talk of the image
and the consumer would pay attention. If the product era was killed by me-too products, the
image era was killed by me-too companies2.
As and when industry and markets graduated from one era to another, the level and magnitude
of communication increased exponentially. Communicating was the norm and thought of
something that would do the trick for marketers. Resultantly, the problem all marketers faced
was of over-communication.
It is interesting to note that the two advertising executives who propounded the very concept of
positioning back in the 1970s for the first time called that era over-communicated. The question
that arose so many years ago, and is still valid, is, "how to communicate and get heard in the
overly communicated society".
The Positioning Era
The two authors of the concept believe that to be successful you have to touch base with
reality3. The only reality that counts is what is already in the mind of the prospect. Creativity
for the sake of creating something new does not help. And, therefore, image building through
advertising meant to create something that does not already exist in consumer's mind doesn't
help. Creating something of that sort is very difficult, if not outright impossible, the authors
believe.
In other words, the thrust of the concept of positioning is to do something effectively with what
already exists in prospect's mind and then capitalize on it. Therefore, the basic approach of
positioning is not to create something new, but to manipulate what is already there in the mind
and to retie the connections that already exist, claim the authors4.
As a defense mechanism against over-communication, the mind rejects a lot of information and
accepts only the one that matches with the prior knowledge, or that complements the prior
knowledge. The only defense mechanism is that a person has an oversimplified mind.
Marketing people therefore should ignore the sending side and do something with the receiving
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Brand Management (MKT624)
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side ­ the prospect's mind. You concentrate on the prospect's perceptions and simplify the
process.
Positioning therefore is not something that you do to the product. It is something you do to the
prospect's mind. You position the product in the mind of the prospect.
How positioning works
Experience has it that positioning works best when you emphasize on things that are not. If you
introduce chewing gum for health conscious people, you position it as "sugar-free", meaning it
is not sugar.
The first car was advertised as the "horseless" carriage. It had no horse and hence it was
different. That positioned the new invention against the transportation of the time. You
highlight the differentiated feature by talking of something that is not there, but at the same
time is in the mind of the prospect. This is a good example of manipulating something that
already exists in prospect's mind.
Things -that are not -can be found in areas other than the basic product itself. This implies that
to effectively position a product in prospects' mind, you do not always have to talk about the
product itself.
If you introduce a low-price item in response to a genuine need, you can position it from price
point of view and talk of the product as a low-price item, meaning it is not a high-price item.
Improving distribution with the help of a new product can go a long way in positioning it as the
one that has hassle-free distribution.
An important factor
The most important thing is that you have to be the first one to get into the consumer's mind
with the position that you want occupied5.
The market research that we carry out as part of customer-based model help companies identify
the areas of growth and expansion and therefore identification of the genuine unmet needs. You
must take the lead, start talking of the unmet need(s), and be the first one to get into the minds
of the prospects.
Bibliography:
1.
Geoffery Randall: "Branding ­ A Practical Guide to Planning Your Strategy";
Kogan Page (53)
2.
Al Ries and Jack trout: "Positioning: The Battle for Your Mind"; McGraw Hill (23)
3.
Al Ries and Jack trout: "Positioning: The Battle for Your Mind"; McGraw Hill (24)
4.
Al Ries and Jack trout: "Positioning: The Battle for Your Mind"; McGraw Hill (24)
5.
Al Ries and Jack trout: "Positioning: The Battle for Your Mind"; McGraw Hill (24)
Suggested readings:
1.
Scot M. Davis: "Brand Asset Management ­ Driving Profitable Growth through
Your Brands"; Jossey-Bass, A Wiley Imprint (91-105)
2.
Al Ries and Jack trout: "Positioning: The Battle for Your Mind"; McGraw Hill (5
27)
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Table of Contents:
  1. UNDERSTANDING BRANDS – INTRODUCTION:Functions of Brand Management, Sales forecast, Brand plan
  2. INTRODUCTION:Brand Value and Power, Generate Profits and Build Brand Equity
  3. BRAND MANIFESTATIONS/ FUNDAMENTALS:Brand identity, Communication, Differentiation
  4. BRAND MANIFESTATIONS/ FUNDAMENTALS:Layers/levels of brands, Commitment of top management
  5. BRAND CHALLENGES:Consumer Revolt, Media Cost and Fragmentation, Vision
  6. STRATEGIC BRAND MANAGEMENT:Setting Objectives, Crafting a Strategy, The Brand Mission
  7. BRAND VISION:Consensus among management, Vision Statement of a Fast Food Company, Glossary of terms
  8. BUILDING BRAND VISION:Seek senior management’s input, Determine the financial contribution gap
  9. BUILDING BRAND VISION:Collect industry data and create a brand vision starter, BRAND PICTURE,
  10. BRAND PICTURE:Brand Value Pyramid, Importance of being at pinnacle, From pinnacle to bottom
  11. BRAND PERSONA:Need-based segmentation research, Personality traits through research
  12. BRAND CONTRACT:The need to stay contemporary, Summary
  13. BRAND CONTRACT:How to create a brand contract?, Brand contract principles, Understand customers’ perspective
  14. BRAND CONTRACT:Translate into standards, Fulfill Good Promises, Uncover Bad Promises
  15. BRAND BASED CUSTOMER MODEL:Identify your competitors, Compare your brand with competition
  16. BRAND BASED CUSTOMER MODEL:POSITIONING, Product era, Image Era, An important factor
  17. POSITIONING:Strong Positioning, Understanding of components through an example
  18. POSITIONING:Clarity about target market, Clarity about point of difference
  19. POSITIONING – GUIDING PRINCIPLES:Uniqueness, Credibility, Fit
  20. POSITIONING – GUIDING PRINCIPLES:Communicating the actual positioning, Evaluation criteria, Coining the message
  21. BRAND EXTENSION:Leveraging, Leveraging, Line Extension in detail, Positive side of line extension
  22. LINE EXTENSION:Reaction to negative side of extensions, Immediate actions for better managing line extensions
  23. BRAND EXTENSION/ DIVERSIFICATION:Why extend/diversify the brand,
  24. POSITIONING – THE BASE OF EXTENSION:Extending your target market, Consistency with brand vision
  25. DEVELOPING THE MODEL OF BRAND EXTENSION:Limitations, Multi-brand portfolio, The question of portfolio size
  26. BRAND PORTFOLIO:Segment variance, Constraints, Developing the model – multi-brand portfolio
  27. BRAND ARCHITECTURE:Branding strategies, Drawbacks of the product brand strategy, The umbrella brand strategy
  28. BRAND ARCHITECTURE:Source brand strategy, Endorsing brand strategy, What strategy to choose?
  29. CHANNELS OF DISTRIBUTION:Components of channel performance, Value thru product benefits
  30. CREATING VALUE:Value thru cost-efficiency, Members’ relationship with brand, Power defined
  31. CO BRANDING:Bundling, Forms of communications, Advertising and Promotions
  32. CUSTOMER RESPONSE HIERARCHY:Brand-based strategy, Methods of appropriations
  33. ADVERTISING:Developing advertising, Major responsibilities
  34. ADVERTISING:Message Frequency and Customer Awareness, Message Reinforcement
  35. SALES PROMOTIONS:Involvement of sales staff, Effects of promotions, Duration should be short
  36. OTHER COMMUNICATION TOOLS:Public relations, Event marketing, Foundations of one-to-one relationship
  37. PRICING:Strong umbrella lets you charge premium, Factors that drive loyalty
  38. PRICING:Market-based pricing, Cost-based pricing
  39. RETURN ON BRAND INVESTMENT – ROBI:Brand dynamics, On the relevance dimension
  40. BRAND DYNAMICS:On the dimension of knowledge, The importance of measures
  41. BRAND – BASED ORGANIZATION:Benefits, Not just marketing but whole culture, Tools to effective communication
  42. SERVICE BRANDS:The difference, Hard side of service selling, Solutions
  43. BRAND PLANNING:Corporate strategy and brands, Brand chartering, Brand planning process
  44. BRAND PLANNING PROCESS:Driver for change (continued), Brand analysis
  45. BRAND PLAN:Objectives, Need, Source of volume, Media strategy, Management strategy