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5.4
.
There
is a move away from mass-market strategies
.
.
.
Experiential marketing
One-to-One marketing
Permission marketing
Experiential Marketing
Employ multiple touch points & multiple
senses
Often involves special events, contests,
promotions, sampling, on-line activities, etc.
Combine brand education & entertainment
Distinctive and relevant
Read Figure 5.2 for Schmitts Guidelines!
One-to-One Marketing:
Competitive Rationale
Consumers help to add value by providing
information
Firm adds value by generating rewarding
experiences with consumers
Creates switching costs for consumers
Reduces transaction costs for consumers
Maximizes utility for consumers
One-to-One Marketing:
Consumer Differentiation
Treat different consumers differently
Different needs
Different values to firm
current
future (life-time value)
One-to-One Marketing:
Fundamental Strategies
Focus on individual consumers Consumer
databases
Respond Interactivity: A dialogue
Customize
Personalizing Marketing
All of these approaches are a means to create deeper,
richer, and more favorable brand associations
Relationship marketing has become a powerful brandbuilding force
can slip through consumer radar
may creatively create unique associations
may reinforce brand imagery and feelings
Product strategy
Pricing strategy
Channel strategy
5.13
Product Strategy
Product Strategy
Perceived quality and value
Brand intangibles : Factors in addition to product
performance such as speed, accuracy, care of product
delivery and installation, the promptness, courtesy, and
helpfulness of customer service.
3- D Marketing approach by McKinsey Consulting :
Functional Benefits, Process Benefits and Relationships
Benefits
Value chain : Create customer value through primary value
creating activities (such as inbound logistics, operations,
outbound logistics, marketing and sales, & service) and
support activities (firm infrastructure, hum resources
management, technology development, procurement)
5.15
Product Strategy
Using Relationship Marketing Perspective in Formulating
Product Strategy and Offering
Customer relationship management (CRM) is the overall
process of building and maintaining profitable customer
relationships by delivering superior value and
satisfaction
Uses a companys data systems and applications to track
consumer activity and manage customer interactions
with the company
Product Strategy
Relationship Marketing
Mass Customization
Making products to fit the customers exact specifications e.g. Dell
Computers, NIKEiD Website, Jerseys, Premier Account of Barclays etc.
AfterMarketing
Those marketing activities that occur after customer purchase. It is
aimed at enhancing the product consumption experience and
thereby build brand equity e.g. innovative design, effective
communication such as product manual etc.
Loyalty or Frequency programmes
Identifying, maintaining, and increasing the yield from a firms best
customers through long-term , interactive, value-added relationships.
Airlines giving free trips and upgrades based on mileage flown. It also
involves co-branding e.g. Airlines and Hotels etc.
Pricing Strategy
Price : The amount of money charged for a
product or service. It is the sum of the values
that consumers exchange for the benefits of
having or using the product or service
5.18
Pricing Strategy
Price premiums are among the most important brand
equity benefits of building a strong brand.
Consumer price perceptions
Consumers often rank brands according to price tiers in a
category.
The relationship between price and quality
5.19
Pricing Strategy
Value to Customers or Perceived Value for Money
Value is the benefit the customer derives from the purchase of the
product. The firm needs to understand the value that the
customer places on the benefits received and then price
accordingly. Effectively, customers assess the price and measure
the benefits received.
Factors that affect the value they place on the product:
1. Status
2. Service and after sales service quality
3. Level of differentiation from competitor products
4. Quality of any packaging
5. Product functionality
6. Any substitute products which may be available
Pricing Strategy
Setting prices to build brand equity
Value pricing
To uncover the right blend of product quality costs, and product
that fully satisfies the needs and wants of consumers and the
profit targets of the firm.
Everyday low pricing (ELPD)
Maintaining consistently low prices on major items every day to
build brand loyalty and fend off private label inroads and reduce
manufacturing and inventory costs e.g. Procter and Gamble
5.21
Pricing Approaches
Value-based pricing: Setting price based on buyers perceptions
of product values rather than on cost.
The targeted value and price then drive decisions about product
design and what costs can be incurred. Pricing begins with
analysing consumers needs and value perceptions and a price
is set to match consumers perceived value
- Market research is required to ascertain the value buyers
assign to product and that of competitors. This can be
difficult.
- If a seller charges more than buyers perceived value, the
companys sales will suffer.
Pricing Strategy
8 Steps to Better Pricing
1. Assess what value your customers place on a product
or service
2. Look for variation in the way customers value the
product
3. Assess customers price sensitivity
4. Identify an optimal pricing structure
5. Consider competitors reactions
6. Monitor prizes realized at the transaction level
7. Access customers emotional response
8. Analyze whether the returns a worth the cost to serve
5.23
Channel Strategy
Marketing Channels
Set of interdependent organizations involved in
the process of making a product or service
available for use or consumption.
The manner by which a product is sold or
distributed can have a profound impact on the
resulting equity and ultimate sales success of
a brand.
5.24
Channel Strategy
Channel strategy includes the design and
management of intermediaries such as
wholesalers, distributors, brokers, and
retailers.
5.25
Channel Design
Direct channels
Selling through personal contacts from the company to
prospective customers by mail, phone, electronic means,
in-person visits, and so forth
Indirect channels
Selling through third-party intermediaries such as agents
or broker representatives, wholesalers or distributors, and
retailers or dealers
Push and pull strategies
Web strategies
5.26
Channel Level
Manufacturer
Channel 2
Manufacturer
Channel 3
Manufacturer
Channel 4
Manufacturer
Consumer
Retailer
Wholesaler
Retailer
Consumer
Consumer
Consumer
1.Market Factors :
2.Producer Factors
3.Product/Brand Factors
4.Competitive Factors
Indirect Channel
1. Availability is critical
2. After sales service is important
2. Selective
is a strategy when a producer uses more than one but fewer than
all of the intermediaries willing to carry the producers products
Televisions
Appliances
Luxury automobiles
High-end apparel
Channel Support
Two such partnership strategies are retail
segmentation activities and cooperative advertising
programs.
Retail segmentation
Retailers are customers too
Cooperative advertising
A manufacturer pays for a portion of the advertising that a
retailer runs to promote the manufacturers product and
its availability in the retailers place of business.
5.40
Key Points
1. All of the four Ps not just promotion have important roles
to play in the creation and maintenance of brand equity.
2. The products and services that firms design are the
cornerstones of customer-based brand equity.
3. Pricing strategy must be based on consumers and the
competition, as well as cost and quality considerations.
5. Channel members should be thought of and treated as
valuable customers whose image and actions can hurt or
enhance brand equity.