Strong brands:

consistency,across
people, across across
situations, over time.
Consmr decision proces
Need recognition
Information search
Alternative evaluation
Purchase decisions
Post purchase
Total set
All brands
avlbl in mrkt

Value proposition: promise that differentiates us in markets.

All benefit: states all benefits in offering. Problem is you
dont assert benefits particular to your brand.
Favorable point difference: show those points that are
relatively better than your competitor. Problem is they may
not be of any value to customer.
Resonating focus: give one or two features that are of value
to customers. Drawback is customer value research is reqd.

Information Search
Awareness set Consideration set
Subset tht
Set tht meets d initial
individual knws Buying criteria

Choice set
Decision
Strng contenders

Purchase decisions
Alternative search
Affective choices: holistic, overall evaluation
Optimizing vs satisficing
Based on how one feels abt a purchase
Beliefs & attitudes
Attribute based: predetermined evaluative criteria
Expectancy value models
Complicated decision rules
a)compensatory: all criterias evaluatedConsumers trade off gud wid bad
b)Non compensatory: +ves dont compensate ve.
i)conjuctive: set min, drop brand that fail min. large to small
ii)disjunctive: set min, accept brand tht exceed any stndrd. Large to manageable
iii)lexicographic: select brand superior on most imp regrdles of other attributes

Company
Customers Competition Context Collaborators
Wat abt us
Who r thy
Proactive not reactive
Wat is gud/bad
R v doin ryt
Why wat
Who r thy
Objectives?
Hw fvrbl posn where buy
Wat gud/bad Who has capabilities v nd
Posn sustainble? How dcide Personality?
Who r channel/
Indstry analysis(swot)
corporate partners
Segmentation Targeting
Positioning
Hw STP creats value?
Who r consmrs largst,Fastst Hw diffrntiate
Mktg resourcs focused
Hw do thy act
Mst profitble Features, benefits
2 bettr meet cust need.
Wat do thy wnt mrkt
Brand promise
Custmrs dvlp pref for
Product: Define Pricing Place Promotion
brand. cust bcms loyal.
Core benefit
Channels Target mrkt
Loyalty leads 2 incrsd
Basic,expected,
Dept/breadth Objectives
mrkt share. Fewr mktg
agmentd,potential
/conflicts Msg,media mix
Resources needed.
1st mover advntg
Bdget,measur rslts Profit inc

5cs

4Ps

Segmentation criteria
Homogenous: similar cust in a segment
Heterogenous: custs unique comprd 2 other sgmnt
Measurable: data shud b avlbl 2 msr size of sgmnt
Substantial: sgmnt shub b lrg enuf for sales&profit
Accesible: rechbl for distribution & communication
Practical: distinctive mktg mix implemntabl fr each
Sgmnt Responsive: bettr response 2 distinct mktg
mix rather thn generic
Variables to Segment & Describe Markets
Demographics: Age, income, marital status, family
type & size, gender, social class Psychographics:
Lifestyle, values, & Personality characteristics
Behavior: Use occasions, usage level, complementary
& substitute products used, brand loyalty,
Decision Making: Individual or group(family)
choice, low or high involvement purchase, attitudes
& knowledge about product class, price sensitivity
Media Patterns: Level of use, types of media used

Determining Which Segments to Target

Size and Growth
Size: Market potential, current market penetration
Growth: Past growth forecasts of technology change
Structural Characteristics
Competition: Barriers 2 entry/exit, position of competitors, ability to retaliate
Segment saturation: Gaps in the market
Protectability: Patentability of products, barriers to entry
Environmental risk: Economic, political, and technological change
Product-Market Fit
Fit: Coherence with companys strengths and image
Relationships wid segments: Synergy, cost intractions, image transfrs, cannibalization
Profitability: Entry costs, margin levels, return on investment

Influence on Marketing Strategy

Consumer decision proces depends
Information Search
on
Get prods into consumers evoked set
Mktg mix: prod,price,place,promotion
Limit information srch if ur brand is prefrrd Psychological factors: motives,attitudes,
Inc info srch if ur alt is not d prefrrd brand Perceptions,learning,lifestyle
Use point-of-purchase advtising effctivly Situational factors: purchase situation,
Accnt fr level of involvemnt
Social factrs: family,refrnce grps,culture
Alternative Evaluation
Perceptual Map: spatial representation of brands. highlighting similarities &
Influence d choice of evaluative criteria
differences among competing brands & reflects position of each brand in d mind of
Influence d rating of ur product on evaluative criteria usd
consumer. Its a tool 2 view competitive landscape & find white spaces
Impact of framing present offer s gain vs. loss or mixed
Identify decision rule usd by targt mrkt&use suitble promotional msgs
LIFETIME VALUE
LIFETIME VALUE WITH

GROWTH IN RETENTION
=

+

=

+ ( + )
MARGIN MULTIPLE
Increasing customer Equity thru LTV:
3Strategies:
Customer acquisition: ,Customer expansion: pricing, share of wallet, redefining
ur business, cross-sellin, focus on customer value over prod features. Customer
retention: Loyal customers more willing 2 pay price premium, satisfied
customers lead to referals, cost 2 service of known customers is low, base profit
more predictable & reliable, loyal customers extend buying across categories.

STP as Marketing Strategy

Segmentation
1. Identify segmentation bases and segment the market
2. Develop profile of resulting segments
Targeting
1. Evaluate attractiveness of each segment based on 3Cs
2. Select target segments
Positioning
1. Use perceptual map to identify current positions
2. Identify positioning concepts for each target segment
3. Select, develop, and communicate the chosen concept

PRICING
Steps in Setting Price
1. Select the price objective: sales oriented: focus on inc sales, doesnt always imply setting low prices, more concerned wid overall mrkt share. Issues: Assumes ppl
will buy if aggressive sales techniques r used, No consideration of value customers have for the product, may lead 2 prices being set below optimal level. Competitor
oriented: Relies on market research on competitors prices, Status quo pricing; Customer value is not considered, particularly common among smaller firms that lack
knowledge or experience in setting prices, non-market leader firms use it to signal similarity with the market leader, new brands set price equal to competitors they wish
to be compared to(consumers use reference prices to estimate quality). Customer orientation: If done correctly, value based pricing generates the most profit, helps you
develop higher quality products, allows you to provide phenomenal customer service, it takes time and resources. Profit orientation: target profit pricing, target return
pricing, maximizing profit. Issues: No consideration of value customers have for the product, may lead to prices being set below optimal level.
2. Determining demand: Price sensitivity, estimate demand curves, price elasticity of demand. Factors Leading 2 Less Price Sensitivity Product distinctive, buyers less
aware of substitutes buyers unable 2 compare quality of substitutes, expenditure is a smaller part of buyers total income, expenditure is small compared 2 d total cost,
part of d cost paid by another party, prod used wid previously purchased assets prod assumed 2 have high quality & prestige, buyers cant store product.
3. Estimate costs: fixed cost, variable cost, total cost, avg cost, cost at diffrnt levels of prodn
4. Analyze competitor price mix: monopoly, oligopoly, monopolistic, pure comptn. Mrkt penetration pricing, price skimming
5. Select pricing method: Markup pricing, Target-return pricing, perceived-value pricing, value pricing, going-rate pricing, auction type pricing, Promotional Pricing
Tactics, loss-leader pricing, special-event pricing, cash rebates, low-interest financing, longer payment terms, warranties & service contracts, psychological discounting
6. Select final price: quantity, functional seasonal discount, price sensitivity due to online stores
Legal Aspects and Ethics of Pricing: Deceptive or Illegal Price Advertising, deceptive Reference prices, loss Leader pricing, bait & Switch, predatory pricing, prices
set low with the intent to drive competitor out of business. - llegal, but difficult to prove, price discrimination, price Fixing, horizontal vs. Vertical

Freemium pricing: Give a lot of value with the free version.

Then hv something say one feature that is very compelling 2 a
subset of users that they would be willing to pay for, to prove
value for money. If custmrs dont clearly grasp what they wud
gain by upgrading, u will monetize fewer of them than you
otherwise might. Following strategy is useful
Eliminate barriers to initial customer acquisition
Convrt custmrs without forcing them into price/value decision
Require as little as possible in the initial customer acquisition
process e.g. no credit card, forced registration, downloads, plugins
Support every browser / OS
Make sure that Free means Free and stays Free(Bait and
Switch is very irritating to customers.)
Good Segmentation critical: Who pays & who gets it for free?
Cost Management
Chosen channels must hv a vry low cost, at least for d free users.
Cust relationship management must b automated
Customer acquisition must be cheap,
Customer retention rate must be high
Enough conversion from free to premium.

Luxury strategy aims at creating the highest brand value & pricing power by
leveraging all intangible elements of singularity- i.e. time, heritage, country of origin,
craftsmanship, man-made, small series, prestigious clients, etc.
Fashion strategy is a totally different business model: here, heritage, time, are not
important; fashion sells by being fashionable, which is to say, a very perishable value.
Premium strategy can be summarized as pay more, get more. Here the goal is to
prove - through comparisons and benchmarking that this is the best value within its
category. Quality/price ratio is the motto. This strategy is, by essence, comparative.
Price war: ways to stop/prevent
Reveal your strategic intentions and capabilities
Offer to match competitors prices,
Reveal your cost advantage
Attack the competitor in other segments
Check your customers and their price sensitivity
Are consumers are more sensitive to quality than price.
r industrial buyers willing 2 pay more for on-time delivery/consistent quality.
Can you:
Increase your product differentiation by adding features
Increase awareness of existing features and benefits.
Emphasize the performance risks in low-priced options
Create alliance with collaborators to enhance value & affect price war outcomes

Positioning: Act of designing the brand

image so that it occupies a distinct & valued
place in the target customers minds.
Requires 3 linkages:
To the product category
To the customer segment
To the relevant purchase or usage occasion
Positioning statement: (product/brand)
is (unique & most important claim) among
all (competitive frame) for (segment)
because (support)
Positioning strategies:
The Open Hole Position: Price is the easiest
hole in the mind to understand and its one
of the easiest holes to fill. eg Haagen-Dazs
"premium" ice cream position.
The New Category: If no hole, create one.
Eg Gatorade, power bar, red bull etc
The Specialist: Eg Starbucks, McDonalds
The Channel Brand: Fill the channel hole.
Eg amazon, ebay etc
The Gender Brand: build by focusing on
half the market. cream for man etc
Trivial Attributes: Eg mint with a hole polo.
Vertical positioning:
more/smaller/cheaper/faster
Horizontal Positioning: different/lifestyle
Positioning Steps
1. Determine consumers perceptions &
evaluations in relation to competitors.
2. Identify competitors positions
3. Determine consumer preferences.
4. Select the position.
5. Monitor the positioning strategy.

EXAMPLE OF COST BASED PRICING

Brand Image
From consumers perspective
- All associations with the brand
Visual representation: Mental Map
- Indicates primary associations (closest to
brand/larger)
- Secondary associations (more distant/smaller)
Brand Identity
From the companys perspective
- All aspirational associations with brand
Unique set of brand associations
- Establishes a relationship between the brand and
the customer
- Generates value proposition involving functional,
emotional, or self-expressive benefits

Brand Equity: Value premium that a compny realizes frm a prod wid recognizable name s compard 2 its generic equivalent. Brand equity built by initial choices,
prod experience, mktg activities, secondry activities.
Brand Elements: slogans, jingles, characters, logos, colors, brand name
Brand Slogans: Short phrases that communicate descriptive/persuasive info abt d brand. Shrt hook that helps consumers grasp d meaning of the brand - what it is
and what makes them special. Often becomes closely tied to advertising campaigns & serve as tag lines 2 summarize d descriptive/persuasion info conveyed in d
ads.
Brand Name: a good name communicates characteristics of d brand, memorable, easily pronounced & spelled, distinctive, appealing, flexible, consistent global
meaning, available
Brand Audit (annual: current meanings and associations)-loyalty, attachment, community, engagement
Brand Tracking (more frequent: awareness, associations, usage)-awareness, attitude, usage
Brand Valuation (formal financial methods)
Brand Extensions: advantages of brand extensions: Firm can spend less on brand awareness, positive consumer acceptance, synergy of umbrella branding and
advertising, lower risk of failure given established awareness and trust, reason to say something new about existing brands. Tata Example
Reason for multiple brands: Increase shelf space & retailer dependence, variety seeking, economies of scale in advertising, sales, merchandising, distribution &
production. Market coverage to fill diffrnt channels of distribution, address diffrnt segments & extend across diffrnt geographic boundaries.
Mission
Developing a communication plan
Awarenessbeliefsattitudebehavior
Markets (Who should I talk to? Target Segment?) Targeting/positioning
Attentioninterestdesireaction
Message content (What should I tell them? Key
Share of mindshare of heartshare of mrkt
Benefit/Positioning)
Mission (What do we intend to achieve? Awareness,
Knowledge, Interest, Trial)
Message design (How should I say it? Creative strategy)
Advertising
Media strategy (How do I reach them?)
decisions
Money (How much do I need to spend?)
Measurement (Was it worth it?)

Message Design

Traditional Media: Metrics for

Interruption Model of Advertising
Reach
Measures the number of people in the
target market exposed to the advertisement
Cost per thousand (CPM)
Frequency
In a crowded media landscape, consumers
may need multiple exposures to an
advertisement before they process it well
enough to affect their purchase decision
Measures the average number of times a
person in the target market is exposed to the
advertisement
Impact
Measures the qualitative value of the
advertisement appearing in a certain media
vehicle or in a certain location in a media
vehicle e.g. GRP

Web 2.0 model of Advertising:

Cultural Mindset
Consumer Co-creation
Customization of the brand by the
consumer eg myDNAfragranc
Consumer generated advertising e.g.
blogs, wikis etc
Customer testimonials and story telling
Social Affiliation
sense of community through virtual
connections eg Mayoclinic,
Digital Self Expression
Use prods & brands to help create their
online identities eg youtube
Sharing
Rapid dispersion of WOM/viral mktg
campaigns eg fiesta

Advertising objectives
Informative Advertising: Communicates 2 create & build brand awareness, often usd 2 inform custmrs abt upcoming sales
events or arrival of new merchandise
Persuasive advertising: Early maturity stages of d prod Life Cycle when competition is most intense, may b used 2 reposition
n establishd brand in d later stage of d prod Life Cycle
Reminder Advertising: Communication used 2 remind or prompt repurchases, occurs aftr d products hv gained market
acceptance
Message designs: Rational appeals, Product demonstration, Use of a spokesperson, testimonials, product comparison
Emotional appeals: use of negative/positive emotions
When 2 nt use celebs: When an ad contains strong arguments
When 2 use humor: d campaign & subject matter r appropriate, d target audience and campaign objectives r sought, use a
single unified theme over & over, employ positive reinforcement of behavior, use humor for well-known, low involvement
products, use humor for high-involvement products ONLY if relevant to a simple argument
Use of negative emotions: when there is only 1 major alternative 2 ur brand, & it has serious shrtcomings, encourage people
2 anticipate their guilt if they ignore reasonable advice.
Connect cognitively: Provide information that customers need, Show the price 2 b a good reference price
Media Strategy
Tactical decisions: Media mix ie TV, Print, Search, Display, Product placement, Viral/WOM. Timing: pulse or even
Choosing the right medium: tv, radio, magazines, newspaper, internet, outdoors, direct mail
MONEY
Setting the advt bdgt: %of sales. Match/better competition, objectives & tasks methods, Parfitt Collins model
MEASUREMENT
Pretesting, tracking, post testing

Channel functions
Customers Logistics Needs:
Product variety: Assortment available at point of sale, breadth and depth of offerings
Convenience/accessibility: Ease of locating point of sale, travel time
Immediacy of availability: Time between order and receipt of goods, lot size flexibility, minimum order size or product size
Customers Information Needs
Primary information: Availability, education abt basic product benefits, touch & feel, demonstrations & training, advice on use
Comparative information: Product comparisons (e.g., vs. competition), prices, special promotions
Quality assurance
Customization of transaction or product: Build to order, complex contract terms, etc.
Channel Design
Direct VS Indirect: Manufacturer can usually provide information more effectively. Intermediaries are usually better at providing logistics
Reasons for going indirect: Resource constraints, esp. when need to penetrate market quickly (market knowledge, need for capital), usually allows broader access to customers, competitive window and possibility of
first mover advantage, specialization (focused energy, expertise) - Better rate of return on core business, one-stop shopping convenience for buyer
Reasons for going direct: Need for quality control (specialized training, processes), importance of non-selling activities (information gathering, relationship building, missionary selling), importance of key accounts Positively affect customer loyalty, greater control on prices and services, prevent unique technology/skills from leaking out, future product strategy, lack of good channel alternatives
Slective: high manufacturer control, high shopping effort
Intensive: low manufacturer control, low shopping effort
Channel Conflicts
Key Sources: Goal divergence, conflicting perceptions of role, conflicting economic incentives
Vertical Conflicts: Double marginalization problem, Channel blockage.
Horizontal Conflicts: one reseller can free-ride on the effort of another, so none has an incentive to actually make the effort, when they compete on price, and low prices are incongruent with your brand identity.
Managing Conflict
Vertical Conflict: Vertically integrate, build explicit relationships, e.g., P&G and Wal-mart, monitor downstream partners, e.g., mystery shoppers, alter incentives via trade promotion policies, e.g., rationing of hot
selling products, etc, aligning the interests (incentives) of channel members is a sure way to improve your firms profitability, market share, and customer satisfaction
Horizontal Conflict: Establish boundaries between channels, by customer or territory /by product classification/by size-of-order. Introduce multiple brands, different brands for different channels, private brands