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2.1
Chapter 2 outlined the concept of CBBE and introduced a brand positioning model based on the concepts of point-of-parity and point-ofdifference This chapter will elaborate two other model; the brand resonance model and brand value chain model, which all together make up the brand planning system
2.2
Brand Resonance: describe how to create intense, active loyalty relationship with customers considers how brand positioning affects what customer think, feel and do and the degree to which they resonance/connected Brand Value Chain: by which marketers can trace the value creation process for their brand to better understand the financial impact of their marketing expenditures and investments
2.3
http://www.vizual.net/blog/wp-content/uploads/2012/04/brand_pyramid_CBBE1.jpg
Cannot establish meaning unless we have created identity Responses cannot occur unless we have developed the right meaning Cannot forge relationship unless we have elicited the proper responses
2.7
Depth of brand awareness Ease of recognition and recall (how likely for brand element to come to mind, brand with high recall is stronger than only recognition) Strength and clarity of category idenification/ membership Breadth of brand awareness The range if Purchase and Usage/Consumption consideration
2.8
Brand Salience
Its important to understand how critical brand salience is to the branding process. Brand salience relates to awareness of your organization and its importance to your audience. This, of course, translates to the importance of marketing, advertising, and public relations in your ongoing communications efforts as they help generate awareness and communicate an organizations relative importance, value proposition, and differentiation.
Source: http://www.vizual.net/blog/wp-content/uploads/2012/04/brand_pyramid_CBBE1.jpg
2.9
The product category hierarchy shows us not only the depth of awareness matters but also the breadth. The brand must not only be top-of-mind and have sufficient mind share, but it must also do so at the right times and places. To fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory. The product category hierarchy plays important role in customer decision making High brand salience: customer make sufficient purchase as well as always think of the brand accross variety of setting
2.10
in to other consumption situation beyond meals ... (gathering, rilex, thirsty, etc)
In brand salience (e.g. Aware of the brand by knowing the product category) - is important but not sufficient because the meaning/image of the brand might also considered Creating brand meaning includes establishing a brand image what the brand is characterized by and should stand for in the minds of customer Two major categories of associations in brand meaning: performance and imagery Those two categories can be formed directly from customer experience, advertising, WOM, etc
2.13
2.15
Demographic characteristics (e.g. gender, age, race, income) Psychographic characteristics (e.g. attitude toward, careers, possessions, social issues) (in B2B context): e.g. size/type of organization Type of channel (e.g. supermarket, specialty stores, internet), specific stores, ease of purchase Time (day, week, month, year, etc.), location, and context of usage/type activity (formal/informal) Sincerity (down-to-earth, honest, wholesome and cheerful), excitement (daring, spirited, imaginative and up-to-date), competence (reliable, intelligent, successful), sophistication (upper class and charming), and ruggedness (outdoor and tough)
Purchase and usage Imagery: what conditions/situations they can/should buy the brand
History, heritage, and experiences: associations to their past and certain noteworthy events in the brands history
Nostalgia Memories
2.16
Example Imagery
2.17
2.18
Brand quality: Judgement of the quality will determine brand attitudes or overall evaluation of a brand
Value and Satisfaction Expertise (competent, innovative and market leader?) Trustworthiness (dependable and keeping customer interest in mind) Likeability (fun, interesting, and worth spending time with) Attitude and perception will not enough if the customer do not consider about the brand from the very beggining, i.e. how personally relevant customer find the brand? the extent to which strong and favorable brand associations can be created as part of the brand image The extent to which customer view the brand as uique and better than other brand i.e. Differentiation
2.19
Brand consideration
Brand superiority
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Frequency and amount of repeat purchases Love brand (favorite possessions; a little pleasure) Proud of brand Kinship Affiliation
Attitudinal attachment
Sense of community
Seek information Join club Visit website, chat rooms Become brand ambassador/evangelist
2.22
Resonance
A key difference, however, is that brand resonance involves two entities, not just one. It is characterized by incredibly strong connections with a brand, resulting in intense loyalty by a brands users and a stronger ability of the brand to resist competitive actions taken by another brand, whether they are financially-based, related to advertising and marketing, etc. In essence, brand resonance is like achieving brand nirvana.
2.24
Source: http://thecadburychocolatier.files.wordpress.com/2012/01/cbbe-sbm-final.jpg
2.25
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0.17
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Resonance
Imagery
0.24
0.58
Feelings
Customers own brands. (the measure of the brand-strength is the way consumer think, feel and act with respect to the brand) Dont take shortcuts with brands. Brands should have a duality. (appeals both heart and head. Rational and Emotional aspects) Brands should have richness Brand resonance provides important focus for their brand-related marketing activities.
2.27
Developing a strong positioning and building brand resonance are crucial, but to better understand the ROI of marketing investment, the BVC tool is necessary BVC: structured approach to assesing the source and outcomes of brand equity and the manner by which marketing activities create brand value BVC profides insights to support bran managers, chief marketing officers, managing directors, and CEO
2.28
2.29
Value Stages
Stage 1 Marketing Program investment Stage 2 Customer Mindset as reflected in Brand Resonance Stage 3 Market/Brand Performance Stage 4 Sharehorder Value With three moderating multipliers: 1. Program Quality multiplier 2. Marketplace condition multiplier 3. Investor sentiment multiplier
2.30
Any marketing program/investment (product research, direct/interactive marketing, publicity, etc) can contribute to the brand value development It depends on qualitative aspects of the program and program quality multiplier, i.e.:
Distinctinevess: how unique/creative/differentiating? Relevance: how meaningful? Integrated: How well integrated the marketing program, past, present, future? Value: how much short/long-run value created? Will it build sales (s/r) or brand equity (l/r)? Excellence: is the individual marketing activity designed to satisfy the highest standard?
2.31
The 5As of customer mind-set (BR) that influence the Brand value:
Deep, Broad brand Awareness, Favourable, unique and strong POP and POD Associations, Positive Brand Attitudes (Judgements and Feelings), Intense brand Attachment and High degree of Brand Activity Competitive superiority Channel and other intermediary support Customer size and profile
2.
3.
The value in customers mind-set will be translated into favorable performance if no significant threat from competitor, support from distribution channels and sizable profitable customers that are attracted to the brand - exist
2.32
The customer mind-set affects customers reactions Price premiums and demand elasticity of the brand Brand sales leads to market share The ability to expand the brand (brand extension or new-brand into related categories) Cost structure (due to reduces marketing expenditures) All factors above lead to Brand Profitability The ability of the brand value to reach the final stage (stock market valuation) depends on the Investor sentiment multiplier 1. Market dynamic (interest rates, supply of capital, etc) 2. Growth potential (prospects of the brand at the current industry) 3. Risk profile (how vulnerable the brand?) 4. Brand contribution (how important is the brand to the firm portfolio?)
2.33
Based on current and forecasted information about a brand as well as many other considerations, the financial marketplace formulates assessments and opinion that have very direct implications for the brand value Three important indicators
1. 2. 3.
Stock price Price/earnings multiple, and Market capitalization for the firm
2.34
Implications of BVC
According to BVC, marketers create value first by making shrewd investments in their marketing program and then maximising, as much as possible, the program, customer, and market multiplier that translate the investment into financial benefits Implications of BVC:
1.
2.
3.
Value creation begins with the marketing program investment should be well-funded, well-designed, well-implemented Value creation require more than marketing invest,ent, because each of the three multipliers can increase/decrease market value This BVC provides a detailed road map for tracking value creation that make marketing research and marketing intelligence efforts easier
2.35
POPs
PODs
2.36
Customer Equity
Other than CRM, some Marketing observers encourage firm to formally define and manage the value of their customers
CE: The sum of lifetime values of all customers Customer lifetime value (CLV) is affected by revenue and by the cost of customer acquisition, retention, and cross-selling Consists of three components (Rust, Zeithamal & Lemon, 2004)
Value equity (objective assessment benefit minus cost) Brand equity (subjective assessment, above & beyond value) Relationship equity (cust tendency to stick with the brand, above and beyond subjective assesment)
2.37
Customer Equity
Blattberg and Deighton (1996) offer eight guidelines as a means of maximizing customer equity:
Invest in highest-value customers first Transform product management into customer management Consider how add-on sales and cross-selling can increase customer equity Look for ways to reduce acquisition costs Track customer equity gains and losses against marketing programs Relate branding to customer equity Monitor the intrinsic retainability of your customer Consider writing separate marketing plansor even building two marketing organizationsfor acquisition and retention efforts
2.38
One way to reconcile the two is to combine both into a matrix, manade and decide the optimal marketing solutions/combinations Brand and Customer Management:
CUSTOMERS
Segment1 Brand 1 Segment2 Segment N
B R A N D
Brand 2
Brand M
2.39
Brand Equity vs Customer Equity: Differences between the two points of view
2.40
Customers drive the success of brands but brands are the necessary touch-point that firms have to connect with their customers. CBBE maintains that brands create value by eliciting differential consumer response to marketing activities In practice; CE and BE are complementary notions with different emphasis: BE emphasizes on front end of marketing program and intangible value potentially created by Marketing Program; CE emphasis on back end of marketing programs and the realized value of marketing activities in term of revenue
2.41
Background: Viagra
Pfizer launched Viagra 1998 Treatment of erectile dysfunction (ED) (male impotence) 150 million men worldwide suffer (50% of all between age 40 and 70) Immediate success - 600 000 prescriptions filled in first month Viagra set back - deaths reported Viagra regained confidence $ 1.8 billion sales (2007)
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Viagra well positioned and well-known Cialis unknown Patients Partners Doctors
2.45
Segmentation criteria
Demographics
Benefit of duration
2.46
Segmentation: Age
Strong correlate between age and reason for not seeking treatment
2.47
Experience with ED Good grasp of duration attribute Most willing to try new drugs that offer improvement in key dimension Smallest segment
Viagra dropouts
Some experience with ED Duration probably not key dimension for dropout Maybe hard to treat group
Very large segment, but no usage familiarity Duration not important, but safety important
2.48
Vertical positioning
36 is much better than 4? Attitude towards sex: Wild, naughty activity vs. romance
Horizontal positioning
Viagra is priced at $10 (without health coverage) Pay more for better performance? If benefit is positioned more horizontally than vertically, unclear if higher charge is appropriate If affluent consumer are targeted, higher price OK If going for broad appeal, consider lower price
2.49
Communication strategy
Communicate to whom?
2.50
Cialis Ads
3.51
3.52
Viagra Ads
3.53
Levitra Ads
3.54