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Chapter 5

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Ryerson University
MKT 510
Ida Berger

Chapter 5— Designing Marketing Programs to Build Brand Equity New Perspectives on Marketing  The strategy & tactics behind marketing programs have changed dramatically in recent years as firms have dealt with enormous shifts in their external marketing environments  4 major drivers of this new economy o Digitization & connectivity o Customization & customization o Disintermediation & reintermediation o Industry convergence  New capabilities of the new economy Consumer companies  Can wield substantially more customer power  Can operate a powerful info & sales channel w/ augmented  Can purchase a greater variety of available goods & servicesreach to inform/promote company products  Can obtain a great amount of info about practically anythingcollect fuller & rich info about their markets, customers,  Can more easily interact with marketers in placing & prospects, & competitors receiving order  Can facilitate 2way communication with their customers &  Can interact with other consumers & compare notes on prospects, & facilitate transaction efficiency products & services  Can send ads, coupons, promotion, & info by email to customers & prospects who give them permission  Can customize their offerings & services to individual customers  Can improve their purchasing, recruiting, training, & internal & external communication  Implications for the practice of brand management o Marketers are increasingly abandoning the mass-market strategies that built brand powerhouses in the 1950s, 1960s, & 1970s to implement new approaches. o Even marketers in staid, traditional industries are rethinking their practices & not doing business as usual. Integrating marketing programs & activities  One implication of CBBE is that the manner in which brand associations are formed does not matter o Only the resulting awareness & strength, favourability, & uniqueness of brand association o Marketers should evaluate all possible means to create knowledge, considering not just efficiency & cost but also effectiveness  Contact: any info bearing experience that a customer or prospect has with the brand, the product category, or the market that relates to the marketer’s products or service o a person can come in contact with a brand in numerous ways  Creative & original thinking is necessary to create fresh new marketing programs that break through the noise in the marketplace to connect with customers. o Marketers are increasingly trying a host of unconventional means of building brand equity. o Ex. Pop-up stores—temporary stores that blend retail & event marketing Personalizing marketing  All of these approaches are a means to create deeper, richer, & more favorable brand associations.  Relationship marketing has become a powerful brand-building force. o Can slip through consumer radar o May reinforce brand imagery & feelings o May creatively create unique associations  Nevertheless, there is still a need for the control & predictability of traditional marketing activities.  Models of brand equity can help to provide direction & focus to the marketing programs.  Personalizing marketing concepts o Experiential marketing o One-to-one marketing o Permission marketing Experiential marketing  Experiential marketing: promotes a product by not only communicating a products features & benefits but also connecting it with unique & interesting experiences  The idea is not to sell something, but to demonstrate how a brand can enrich a customer’s life  Ex. American express—always looking for ways to provide special experiences & access to card members  Arguably we are on the threshold of the “experience economy” in which all businesses must give memorable events for their customers o If you charge for the time customers spend with you, then you in the experience business One-to-one marketing  One-to-one marketing: customers help to add value by providing info to marketers; marketers add value, in turn, by taking that info & generating rewarding experiences for consumers  Based on several fundamental strategies o Focus on individual consumers through consumer databases—we single out consumers o Respond to consumer dialogue via interactivity—the consumers talk to us o Customize products/services—we making something unique for him/her o Treating different consumers differently because of their different needs, & their different current & future value to the firm  Ordered wine with an ice cube at one hotel, goes to a subsequent hotel & when orders wine making sure there is a ice cube in that glass  5 key steps o Identify consumers, individually & addressably o Differentiate them by value & needs o Interact with them more cost-efficiently & effectively o Customize some aspect of the firm’s behavior o Brand the relationship Permission marketing  Permission marketing: the practice of marketing to consumers only after gaining their express permission—another way to break through clutter & build customer loyalty  Gsten the large number of marketing communications, if the marketers want to attract a consumers attention, they 1 need to get his/her permission with inducement (free sample, contest etc) o Might develop stronger relationships with consumers  5 steps to effective permission marketing o Offer the prospect an incentive o Offer the interest prospect a curriculum over time, teaching the consumer about the product/service being marketing o Reinforce the incentive to guarantee that the prospect maintains his/her permission o Offer additional incentives to get more permission from the consumer o Leverage the permission to change consumer behaviour toward profits  Ex. Amazon—after purchasing a book, send you an email containing other relevant books that you may like to order Reconciling the new marketing approaches  One-to-one, permission, & experiential marketing are all potentially effective of getting consumers more actively involved with a brand.  Marketing strategies must transcend the actual product/service to create stronger bonds with consumers & maximize brand resonance  Relationship marketing: attempts to provide a more holistic, personalized brand experience to create stronger consumer ties  Supporting marketing mix should be designed to enhance awareness & establish desired brand image. Product strategy  The product itself is the primary influence on what consumers experience with a brand  For brand loyalty to exist, consumers experiences with the product must at least meet, if not actually surpass their expectations Perceived quality & value  Perceived quality: customers perceptions of the overall quality or superiority of a product/service compared to alternatives & with respect to its intended purpose  Consumer beliefs about these characteristics (performance, features, conformance quality, reliability, durability, serviceability, style & design) often define quality and, in turn, influence attitudes & behaviour toward
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