1. CONNECTING WITH CUSTOMERS AND BUILDING STRONG BRANDS
UNIT 2
CONNECTING WITH CUSTOMERS AND BUILDING STRONG BRANDS

2. What Influences Consumer Behavior?
Cultural Factors
Social Factors
Personal Factors

3. Culture
Culture is the fundamental determinant of a person’s wants and behaviors acquired through socialization processes with family and other key institutions.

4. Subcultures
Nationalities
Religions
Racial groups
Geographic regions

5. Social Classes Upper uppers Lower uppers Upper middles Middle class
Working class
Upper lowers
Lower lowers

6. Social Factors
Reference
groups
Family
Social
roles
Statuses

7. Reference Groups Membership groups Primary groups Secondary groups
Aspirational groups
Dissociative groups

8. Personal Factors Age Self- Life cycle concept stage Occupation
Lifestyle
Wealth
Values
Personality

9. The Family Life Cycle

10. Figure 6.1 Model of Consumer Behavior

11. Motivation Freud’s Theory Behavior is guided by subconscious
motivations
Maslow’s
Hierarchy
of Needs
Behavior
is driven by
the lowest,
unmet need
Herzberg’s
Two-Factor
Theory
Behavior is
guided by
motivating
and hygiene
factors

12. Maslow’s Hierarchy of Needs

13. Herzberg’s Two-Factor Theory

14. Figure 6.4 Consumer Buying Process
Problem Recognition
Information Search
Evaluation
Purchase Decision
Postpurchase
Behavior

15. Sources of Information
Personal
Commercial
Public
Experiential

16. ANALYSING BUSINESS MARKETS
The Business Market
The business market consists of all the organizations that acquire goods and services used in the production of other products or services that are sold, rented, or supplied to others.
More dollars and items are involved in sales to business buyers than to consumers
Characteristics of Business Markets
Fewer, larger buyers
Close supplier-customer relationship
Professional purchasing
Several buying influences
Multiple sales call
Derived demand
Inelastic demand
Fluctuation demand
Geographically concentrated buyers
Direct purchasing

17. Buying Situations
1.Straight rebuyis when the purchasing department reorders on a routine basis and chooses from suppliers on an ―approved lists.‖
2.Modified rebuyis when the buyer wants to modify product specifications, prices, delivery requirements, or other items.
3.New taskis when the purchaser buys a product or service for the first time.
Systems Buying and Selling
Systems buying
Buy total solution from 1 seller
Systems selling
Key industrial marketing strategy -large-scale industrial projects

18. Participants in the Business Buying ProcessThere are seven roles in the purchase decision process:
1.Initiators—requests the product
2.Users—will use the product
3.Influencers—influence the buying decision
4.Deciders—makes the decision of what to purchase
5.Approvers—authorize the proposal
6.Buyers—have the formal authority to purchase
7.Gatekeepers—have the power to prevent seller information from reaching members of the buying center
6-10

19. Tapping Into Global Markets

20. What is a Global Firm?
A global firm is one that operates in more than one country and captures R&D, production, logistical, marketing, and financial advantages in its costs and reputation that are not available to purely domestic competitors.

21. Major Decisions in International Marketing
Deciding whether to go
Deciding which markets to enter
Deciding how to enter
Deciding on the
marketing program
Deciding on the
marketing organization

22. Top Global Firms Based in Developing Markets
America Movil
Cemex
China Mobile
CNOOC
Embraer
Gazprom
Haier
Hisense
Huawei Technologies
Infosys Technologies
Koc Holding
Lenovo Group
MMC Norilsk Nickel
Mahindra & Mahindra

23. Five Modes of Entry into Foreign Markets
Indirect
exporting
Direct
exporting
Licensing
Joint
ventures
Direct
investment
Commitment, Risk, Control, Profit Potential

24. Table 21.2 Global Marketing
Advantages
Economies of scale
Lower marketing costs
Power and scope
Consistency in brand image
Ability to leverage
Uniformity of marketing practices
Disadvantages
Differences in consumer needs, wants, usage patterns
Differences in consumer response to marketing mix
Differences in brand development process
Differences in environment

25. McDonald’s Franchises Are Sold Worldwide

26. Identifying Market Segments and Targets

27. What is a Market Segment?
A market segment consists of a group of customers who share a similar set of needs ad wants.

28. Preference Segments
Homogeneous preferences exist when consumers want the same things
Diffused preferences exist when consumers want very different things
Clustered preferences reveal natural segments from groups with shared preferences

29. Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral

30. Segmenting Consumer Markets
Geographic
Demographic
Psychographic
Behavioral

31. Crafting the Brand Positioning

32. What is Positioning?
Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the mind of the target market.

33. Examples of Negatively Correlated Attributes and Benefits
Low-price vs. High quality
Taste vs. Low calories
Nutritious vs. Good tasting
Efficacious vs. Mild
Powerful vs. Safe
Strong vs. Refined
Ubiquitous vs. Exclusive
Varied vs. Simple

34. Differentiation Strategies
Product
Personnel
Channel
Image

35. Marketing Program Modifications
Prices
Distribution
Advertising
Sales promotion
Services

36. Creating Brand Equity

37. What is a Brand?
A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

38. What is Brand Equity?
Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.

39. What is Brand Equity?
Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.

40. Chapter Questions What is a brand and how does branding work?
What is brand equity?
How is brand equity built, measured, and managed?
What are the important decisions in developing a branding strategy?
Chapter Questions

41. ESPN: A Strong Brand

42. Steps in Strategic Brand Management
Identifying and establishing brand positioning
Planning and implementing brand marketing
Measuring and interpreting brand performance
Growing and sustaining brand value
Steps in Strategic Brand Management

43. What is a Brand?
A brand is a name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.

44. The Role of Brands Identify the maker Simplify product handling
Organize accounting
Offer legal protection

45. The Role of Brands Signify quality Create barriers to entry
Serve as a competitive advantage
Secure price premium

46. Branding is endowing products and services with the power of the brand.
What is Branding?

47. Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.
What is Brand Equity?

48. Thoughts
Feelings
Knowledge
Images
Beliefs
Experiences
Brand Knowledge

49. Advantages of Strong Brands
Improved perceptions of product performance
Greater loyalty
Less vulnerability to competitive marketing actions
Less vulnerability to crises
Larger margins
More inelastic consumer response
Greater trade cooperation
Increased marketing communications effectiveness
Possible licensing opportunities
Advantages of Strong Brands

50. A brand promise is the marketer’s vision of what the brand must be and do for consumers.
What is a Brand Promise?

51. Brand Equity Models Brand Asset Valuator Aaker Model BRANDZ
Brand Resonance
Brand Equity Models

52. Figure 9.3 Brand Dynamics Pyramid
Strong Relationship
Bonding
Advantage
Performance
Relevance
Figure 9.3 Brand Dynamics Pyramid
Presence
Weak Relationship

53. Brand Elements Brand names URLs Slogans Elements Logos Characters
Symbols
Brand Elements

54. Brand Element Choice Criteria
Memorable
Meaningful
Likeability
Transferable
Adaptable
Protectible

55. Measuring Brand Equity
Brand Audits
Brand Tracking
Brand Valuation

56. Managing Brand Equity Brand Reinforcement Brand Revitalization
Brand Crises

57. Devising a Branding Strategy
Develop new brand elements
Apply existing brand elements
Use a combination of
old and new

58. Addressing Competition and Driving Growth

59. Competitive Strategies for Market Leaders
Expanding total market demand
Protecting market share
Increasing market share
Suppose a market is occupied by the firms shown in Figure Forty percent is in the hands of a market leader, another 30 percent belongs to a market challenger, and 20 percent is claimed by a market follower willing to maintain its share and not rock the boat. Market nichers, serving small segments larger firms don’t reach, hold the remaining 10 percent. Sometimes growth depends on adopting the right competitive strategies.
To stay number one, the firm must first find ways to expand total market demand. Second, it must protect its current share through good defensive and offensive actions. Third, it should increase market share, even if market size remains constant.
Competitive Strategies for Market Leaders

60. Marketing Strategies: Introduction Stage
Pioneering advantages
Recall of brand name
Establishes product class attributes
Captures more uses in middle of market
Pioneering drawbacks
Imitators can surpass innovators
Once leadership is lost, it’s rarely regained
Companies that plan to introduce a new product must decide when to do so. To be first can be rewarding, but risky and expensive. To come in later makes sense if the firm can bring superior technology, quality, or brand strength to create a market advantage.
Marketing Strategies: Introduction Stage

61. Marketing Strategies: Growth Stage
To sustain rapid market share growth now:
Improve product quality and add new features
Add new models and flanker products
Enter new market segments
Increase distribution coverage and enter new distribution channels
Shift from awareness and trial communications to preference and loyalty communications
Lower prices to attract the next layer of price-sensitive buyers
By spending money on product improvement, promotion, and distribution, the firm can capture a dominant position. It trades off maximum current profit for high market share and the hope of even greater profits in the next stage.
Marketing Strategies: Growth Stage