BUILDING THE BRAND Communicating Marketing Strategy in a Changing World Bases for Segmentation.

BUILDING THE BRAND

Communicating Marketing Strategy in a Changing World

Bases for Segmentation

The currency of business

Establishes competitive advantage

Is key to creating customer value

BRAND

Brands are the set of tangible and intangible attributes

perceived by the consumer

• Brands are more than just images, logos and ads….

• ….they are the culture through which consumers understand, value and experience the product

Brands

• We as consumers “affiliate” with brands because they meet our expectations. Once we affiliate, we are unlikely to seek any new information that would contradict the “brand culture.”

Brands

• As a result, powerful brands

– Leverages market dominance with the channel and retailers

– Protects market share– Builds equity in the company– Facilitates new product entry– Unite consumers around powerful values and

ideals

Brands

• Nike: defined American achievement, dedication and initiative “Just do It”

• Apple: represents the iconoclastic, creative, independent values of the information age

Brands

• Brand identity and value are communicated through:

• Retail channels Management & labor• Pricing Public relations• Packaging Sales force• Product Advertising• Internal corporate culture• Customer service• Warranties and guarantees

Brands

Using Advertising to Communicate Brand

It’s not enough anymore

Advertising: Creates and Reflects Contemporary Culture

• Public health issues

• Economic competition

• Consumerism

• Gap between rich and poor

• Symbolic communication

• Information overload

• Economic health

• Shifting cultural values

• Selling of political candidates

• Globalization of American culture

• Privacy

• Technology advancements

Common Criticisms

• Makes people believe they need things they really don’t

• Promotes stereotypes and poor lifestyles

• Lulls people into thinking that happiness can be achieved through purchasing

• Is crass and annoying

Can it also be…?

• An important tool to solve real business problems

• A social information tool• A driver of capitalism and contributor to GNP• A service to inform consumers • Essential for competitive marketing and

consumer choice• Add value to a company through brand building

How do we create advertising to meet marketing/brand

objectives?

…(and how do we do it in a world that changes

every day?)

Advertising vs. Marketing

• A subset of marketing• Concerned with

promoting and communicating marketing strategy to consumers

• Is the “P” of Promotion

• Defines the art of product strategy

• Focused on 4 “Ps”-– Price– Product– Place– Promotion

Marketing

• “The process of planning and executing the development, pricing, promotion and distribution of ideas, goods and services to create exchanges that satisfy individual and organization objectives.”

» American Marketing Association

Marketing 4Ps

• Product: How do we create a product that satisfies the needs of consumers?

• Price: How do we price the product for consumer benefit (price elasticity of demand)?

• Placement: How do we distribute the product to reach consumers?

• Promotion: How do we communicate our product’s benefits to consumers?

Advertising

• Any paid form of non-personal communication about an organization, product, service or idea by an identified sponsor

• Is a central component of the promotional mix: what combination of media/communication will we use to deliver the message?

Advertising

–Create awareness

–Change attitudes

–Change behavior

The Growth of Advertising and Promotion

Expenditure in Billions of Dollars

$0 $50 $100 $150 $200 $250 $300

AdvertisingOutside U.S.

U.S. SalesPromotion

U.S. Advertising

2002

1980

© 2003 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Traditional CompensationTraditional Compensation Performance Based Compensation Performance Based Compensation Traditional CompensationTraditional Compensation Performance Based Compensation Performance Based Compensation

Media AdvertisingMedia Advertising Multiple Forms of CommunicationMultiple Forms of Communication

Mass MediaMass Media Specialized MediaSpecialized Media

Manufacturer DominanceManufacturer Dominance Retailer DominanceRetailer Dominance

General FocusGeneral Focus Data Based MarketingData Based Marketing

Low Agency AccountabilityLow Agency Accountability Greater Agency AccountabilityGreater Agency Accountability

Limited Internet AvailabilityLimited Internet Availability Widespread Internet AvailabilityWidespread Internet Availability

Media AdvertisingMedia Advertising Multiple Forms of CommunicationMultiple Forms of Communication

Mass MediaMass Media Specialized MediaSpecialized Media

Manufacturer DominanceManufacturer Dominance Retailer DominanceRetailer Dominance

General FocusGeneral Focus Data Based MarketingData Based Marketing

Low Agency AccountabilityLow Agency Accountability Greater Agency AccountabilityGreater Agency Accountability

Marketing Revolution and Shifting Tides

From Toward


Advertising in Transition

• Globalization

– More clients demand agencies offer:• Global coverage• Wide range of communication services, i.e.

advertising, PR, events, direct marketing• Total media services: ability to place media in all

channels, globally


• Media Clutter and Fragmentation

– More and more media channels in print, broadcast and even alternative media mean its harder to find a mass audience

– Advertising needs to be more creative, strategic, guerilla-like to stand apart


• Budget fragmentation

– More and more ad dollars are shifting out of traditional advertising into sales promotions,

i.e. coupons, sweepstakes, offers, “deals.”


• New technology

– Internet, cell phones, wireless technology, video games all change the landscape of advertising and change the relationship between the consumer and company

– TIVO and other recording devices make it possible to skip over advertising


• The rise of Integrated Marketing Communications

– IMC refers to building a communications campaign through multiple channels, i.e. advertising, sales promotions, PR, direct mail, sales, internet, etc. to extend and amplify the brand message…to create the “brand culture”

IMC–Audience Contact Points

Marketing Communications

Audience

Marketing Communications

Audience

Point of PurchasePoint of

Purchase PublicityPublicity Public Relations

Public Relations PackagingPackaging

DirectResponse

DirectResponse

Sales Promotion

Sales Promotion

EventsEventsOutdoorOutdoorBroadcast Media

Broadcast MediaPrint MediaPrint Media

Direct MailDirect Mail

Internet/Interactive

Media

Internet/Interactive

Media



• Consumer fatigue and cynicism

– Consumers are “burnt out” by advertising and tune it out

– Young consumers, in particular, don’t believe advertising and are cynical bout its attempts to “manipulate” consumers


• Drive for quantification

– More and more clients want to see a return on investment…they want to be able to see that advertising had some effect, i.e. increased sales, generated awareness or a response

Advertising in transition

• Growing Importance of the “Brand”

– Brand loyalty is the “holy grail” of advertising. It ensures repeat customers, stabilizes sales

IMC and Branding

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

Brand Identity is a combination of factors: Name, logo, symbols, design, packaging, product or service performance, and image or associations in the consumer’s mind.

2003 Brand Value(Billions of Dollars)

1. Coca-Cola$70.5

2. Microsoft$65.1

3. IBM$51.8

4. GE $42.35. Intel

$31.16. Nokia

$29.47. Disney

$28.08. McDonald’s

$24.79. Marlboro

$22.210. Mercedes

$21.4

IMC plays a major role in the process of developing and sustaining brand identity and equity.

IMC plays a major role in the process of developing and sustaining brand identity and equity.



• Customization and Relationship Building

– Consumers demand a more personalized message and relationship with the companies they buy from


• Growing Importance of Retailers

– Large retailers have more control of how the product is presented to the consumer, what products are carried in the stores

– Large retailers now have their own store brands to compete with national brands


• Consolidation of ad agencies

– More than 60% of all advertising revenue is controlled by 4 large ad conglomerates

– Publicis (Paris)– WPP (London)– Interpublic (New York)– Omnicom (new York)

1. A detailed situation analysis1. A detailed situation analysis

2. Specific marketing objectives2. Specific marketing objectives

3. A marketing strategy and program3. A marketing strategy and program

4. A program for implementing the strategy4. A program for implementing the strategy

5. A process for monitoring and evaluating performance5. A process for monitoring and evaluating performance

1. A detailed situation analysis1. A detailed situation analysis

3. A marketing strategy and program3. A marketing strategy and program

4. A program for implementing the strategy4. A program for implementing the strategy

2. Specific marketing objectives2. Specific marketing objectives

The Marketing Plan


AdvertisingAdvertising

Direct MarketingDirect Marketing

Interactive/Internet Marketing


Sales PromotionSales Promotion

Publicity/PublicRelations


Personal SellingPersonal Selling

AdvertisingAdvertising

Direct MarketingDirect Marketing



Sales PromotionSales Promotion



Basic Elements of the Promotional Mix


Primary vs. Selective Demand Advertising

Primary vs. Selective Demand AdvertisingPrimary vs. Selective Demand Advertising

Primary vs. Selective Demand Advertising

Business-to-Business AdvertisingBusiness-to-Business Advertising

Organizations

National AdvertisingNational Advertising

Retail/Local AdvertisingRetail/Local Advertising

Professional AdvertisingProfessional Advertising

Trade AdvertisingTrade Advertising

National AdvertisingNational Advertising

Retail/Local AdvertisingRetail/Local Advertising

Business-to-Business AdvertisingBusiness-to-Business Advertising

Professional AdvertisingProfessional Advertising

Classifications of Advertising

Consumers


DirectResponse

Advertising

DirectResponse

Advertising

DirectResponse

Advertising

DirectResponse

Advertising

DirectMail

DirectMail

CatalogingCataloging

TelemarketingTelemarketing

InternetSales

InternetSales

ShoppingChannelsShoppingChannels

DirectMail

DirectMail

TelemarketingTelemarketing

CatalogsCatalogs

ShoppingChannelsShoppingChannels

Direct Marketing is Part of IMC

DirectMarketing

DirectMarketing


Builds and Maintains Customer

Relationships

Builds and Maintains Customer

Relationships

Obtains Customer Database

Information


Information

Communicates and Interacts With Buyers


Provides Customer

Service and Support

Provides Customer

Service and Support

Educates or Informs

Customers

Educates or Informs

Customers

A Persuasive Advertising

Medium


Medium

A Sales Tool or an Actual Sales Vehicle



Information


Information



Provides Customer

Service and Support

Provides Customer

Service and Support

Educates or Informs

Customers

Educates or Informs

Customers


Medium


Medium



Using the Internet as an IMC Tool

TheInternet

TheInternet


• Consumer-oriented

• [For end-users]

• Trade-oriented• [For resellers]

Sales Promotion Tools

EventsEvents

Loyalty ProgramsLoyalty Programs

Bonus Packs Bonus Packs

Refunds/Rebates Refunds/Rebates

Contests/SweepstakesContests/Sweepstakes

PremiumsPremiums

SamplesSamples

CouponsCoupons

CoopAdvertising

CoopAdvertising

TradeShowsTradeShows

TrainingProgramsTraining

Programs

POP DisplaysPOP Displays

TradeAllowances


Introduce New Products


Get Existing Customers to

Buy More


Buy More

Attract New Customers


Maintain Sales In Off Season


Increase Retail Inventories


Tie In Advertising & Personal

Selling


Selling

Enhance Personal Selling


Combat Competition

Combat Competition




Buy More


Buy More








Selling


Selling



Various Uses of Sales Promotion

SalesPromotion

SalesPromotion


InterviewsInterviewsInterviews Interviews

FeatureArticlesFeatureArticles

SpecialEventsSpecialEvents

PressConferences

PressConferences

NewsReleases

NewsReleases

FeatureArticlesFeatureArticles

SpecialEventsSpecialEvents

NewsReleases

NewsReleases

Publicity Vehicles

PublicityVehiclesPublicityVehicles


Corporate AdvertisingCorporate

Advertising Cause-related

MarketingCause-related

Marketing

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Special EventSponsorship

PublicityVehicles

CommunityActivities

Public AffairsActivities

SpecialPublications

Public Relations Tools


Typical Full-Service Agency Organization


WritersArt Directors

Traffic

TVProduciton

Traffic

PrintProduction

VP CreativeServices

AccountExecutive

AccountSupervision

VP AccountServices

Media Research SalesPromotion

VP MarketingServices

Personnel Accounting Finance

OfficeManagement

VP Managementand Finance

President

Board ofDirectors

Services Provided by Agencies


Agency ServicesAgency Services

The link between agency and client

Managed by the Account Executive

The link between agency and client

Managed by the Account Executive

Research department may design and execute research programs

Media department may analyze, select and contract media resources

Research department may design and execute research programs

Media department may analyze, select and contract media resources

Creation and execution of ads

Copywriters, artists, other specialists

Creation and execution of ads

Copywriters, artists, other specialists

Marketing Services

Marketing Services

Account Service

Account Service

Creative ServicesCreative Services

Marketing Services

Marketing Services

Account Service

Account Service

CommissionsMethod

CommissionsMethod

Cost-PlusAgreementsCost-Plus

Agreements

PercentageCharges

PercentageCharges

FeeArrangements

FeeArrangements

Incentive-BasedPayment

Incentive-BasedPayment

CommissionsMethod

CommissionsMethod

Cost-PlusAgreementsCost-Plus

Agreements

PercentageCharges

PercentageCharges

FeeArrangements

FeeArrangements

Methods of Agency Compensation


CompensationMethods

CompensationMethods

Positioning Through Marketing StrategiesPositioning Through Marketing Strategies

Selecting Market To TargetSelecting Market To Target

Determining Market SegmentationDetermining Market Segmentation

Identify Markets With Unfulfilled NeedsIdentify Markets With Unfulfilled Needs

Selecting Market To TargetSelecting Market To Target

Determining Market SegmentationDetermining Market Segmentation

Identify Markets With Unfulfilled NeedsIdentify Markets With Unfulfilled Needs

The Target Marketing Process


BehaviorBehavior

BenefitsBenefits

OutletsOutlets

BenefitsBenefits

OutletsOutletsBehaviorBehavior

PsychographicPsychographic

GeographicGeographic

DemographicDemographicPsychographicPsychographic DemographicDemographic

GeographicGeographic

Bases for Segmentation

CustomerCharacteristics

CustomerCharacteristics

SocioeconomicSocioeconomic

BuyingSituationBuying

Situation

UsageUsage

SocioeconomicSocioeconomic


What Position Do We Have Now?


Do We Have the Money To Do the

Job?


Job?

What Position Do We Want To

Own?


Own?

From Whom Must We Win This Position?


Do We Have the Tenacity To Stay

With It?


With It?


With It?


With It?


Job?


Job?




Own?


Own?



Does Our Creative Strategy

Match It?

Does Our Creative Strategy

Match It?

Developing a Positioning Strategy


ThePosition

ThePosition

By Attributes and Benefits?By Attributes and Benefits?

By Price or Quality?By Price or Quality?

By Use or Application?By Use or Application?

By Product Class?By Product Class?

By Product User?By Product User?

By Competitor?By Competitor?

By Cultural Symbols?By Cultural Symbols?

By Attributes and Benefits?By Attributes and Benefits?

By Price or Quality?By Price or Quality?

By Use or Application?By Use or Application?

By Product Class?By Product Class?

By Product User?By Product User?

By Competitor?By Competitor?

Positioning Strategies


How shouldHow shouldwe position?we position?

BUILDING THE BRAND Communicating Marketing Strategy in a Changing World Bases for Segmentation.

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Transcript of BUILDING THE BRAND Communicating Marketing Strategy in a Changing World Bases for Segmentation.