Branding, Positioning, and the Integrated Marketing Communications Plan

Transcription

1 Chapter2 Branding, Positioning, and the Integrated Marketing Communications Plan LEARNING OBJECTIVES Students should be able to answer the following questions: 1. Why is a corporation's image vitally important? 2. What kinds of tactics and plans can be used to build an effective corporate image? 3. What are family brands, brand extensions, flanker brands, co-brands, private brands, brand equity, and brand recognition? 4. How are logos, packages, and labels related to image and brand management? 5. which brand and product characteristics can be used to establish a positive position in the market? CHAPTER OVERVIEW One of the most critical ingredients in the successful development of an integrated marketing communications plan is effective management of an organization s brand and image. The first part of this chapter examines activities involved in managing a corporation s brand, and perspectives from both consumers and the company. An important part of a firms brand strategy is the type of approach taken to extending brands. The second part of this chapter is a presentation of the types of positioning strategies marketing managers employ. The third part of the chapter looks at marketing communications and brand equity and components of an IMC plan. Finally the chapter wraps up with the implications of branding and positioning in International markets. 16

2 INDUSTRY PROFILE Sushant Trivedi, Assistant Brand Manager, Gillette, Proctor &Gamble, Toronto Sushant believes he has his dream job because he has always been a Gillette guy. Being a part of a Proctor and Gamble company has its advantages. Sushant credits the company for exposing him to different areas of business allowing him to use his transferable skills. Questions for Students: 1. Why is Proctor and Gamble such a respected company? Provide examples from the article. 2. What are three skills that Sushant credit for his success as an assistant brand manager? BRANDS Effective marketing communications starts with a clearly identified brand. A brand can be described as a name, logo, or other symbol used by firms to differentiate themselves from competitors. Brand identity summarizes what the company stands for and the position the company has established. Brand identity summarizes what the company stands for. Brand equity is the set of characteristics unique to a brand. It is the value that stakeholders assign to a brand over and above the value of an equal but unbranded product. Brand parity is the perception that there are no tangible differences between competing brands. Brand equity is a strong weapon that might dissuade consumers from looking for a cheaper product or for special deals or incentives to purchase another brand. See Table 2.1 lists the top 10 global brands. 17

3 HOW DOES A BRAND CREATE VALUE Branding Value The Customer Perspective From a customer s perspective the brand serves several useful functions. These include: Providing assurance regarding purchase decisions of familiar products in unfamiliar settings Giving assurance about the purchase when the buyer has little or no previous experience with the good or service Reducing search time in purchase decisions Providing psychological reinforcement and social acceptance of purchases Measuring Brand Equity Brand metrics are measures of returns on branding investments, including awareness, recall, and recognition. Figure 2.2 shows the most trusted brands. Branding Value The Company Perspective From the viewpoint of the firm itself, a strong brand generates many benefits: Extension of positive customer feelings to new products The ability to charge a higher price or fee Consumer loyalty leading to more frequent purchases Positive word-of-mouth endorsements Higher level of channel power The ability to attract quality employees More favourable ratings by financial observers and analysts The Road to Brand Value Research has identified five key dimensions to mindset that essentially follow the customer, from introduction to the brand to post-purchase behaviours: Brand awareness Associations that customers make with brands Attitudes about the brand being able to outperform competing brands Brand attachment (loyalty) Brand activity how customers use the brand 18

4 Approaches to Branding A family brand is one in which a company offers a series or group of products under one brand name. Brand extension is the use of an established brand name on goods or services that are not related to the core brand. A flanker brand is the development of a new brand by a company in a good or service category it currently has as a brand offering. Flanker brands can help a company offer a more complete line of products, creating barriers to entry for competing firms. Figure 2.5 lists some of the brands sold by Proctor and Gamble. Co-branding can take three forms: 1. Ingredient branding is the placement of one brand within another brand. 2. Cooperative branding a joint venture of two or more brands into a new product or service. 3. Complementary branding is the marketing of two brands together to encourage co-consumption or co-purchases. Co-branding succeeds when it builds the brand equity of both brands. There can be risks in co-branding. If the relationship fails to do well in the marketplace both brands normally suffer. Private brands (also known as private labels) are proprietary brands marketed by an organization and normally distributed exclusively within the organization s outlets. Several changes have occurred in the private brand arena, summarized in Figure 2.12 Quality levels of private label brands have improved. Many are perceived as a value purchase. Loyalty towards stores has been gaining although loyalty towards individual brands has been declining, giving an advantage to private labels. Private labels are used to differentiate retail outlets. Many firms are now advertising company private brands. There is increase quality of in-store displays for and packaging of private labels. Some manufacturers have responded aggressively to the inroads made by private labels in the clothing industry by increasing advertising budgets to restore the brand name s image. Another approach manufacturers have taken to reduce the negative impact of private labels is to expand their offerings. 19

5 Figure 2.6 lists some tactics used by manufacturers to fight the gains made by private labels. Brand Names The corporate name is the overall banner under which all operations occur. Corporate names can be divided into four categories as shown in Figure 2.7. They are as follows: Overt names reveals what a company does Implied names contains recognizable words that explains what the company does Conceptual names captures the essence of what a company offers Iconoclastic names represents something unique, different, and memorable POSITIONING Positioning is creating a perception in the consumer s mind regarding the nature of a company and its products relative to the competition. Positioning consists of two important elements: 1. It is established relative to the competition. 2. It exists in the minds of consumers. Effective positioning can be achieved in seven different ways, as summarized in Figure 2.8: 1. Attribute positioning is a product trait or characteristic that sets it apart from other products. 2. Using competitors to garner a position in the consumer s mind is another common tactic, where one brand is contrasted to show the position of another. 3. Use or application positioning involves creation of a memorable set of uses for a product. 4. The price/quality relationship is often used by businesses on the extremes of the price range. 5. A product user positioning strategy distinguishes a brand or product by clearly specifying who might use it. 6. Sometimes firms seek to position themselves in a particular product class. 7. Identifying a product with a cultural symbol is difficult, but if done successfully, can become a strong competitive advantage for a firm. Maintaining, Rejuvenating, and Repositioning a Brand A brands positioning is never completely fixed, and can be changed. Maintaining a Brands Image o Consistency is key Rejuvenating a Brand 20

6 o May be necessary if firm has encountered negative publicity Repositioning a Brand o May be necessary when a brands target market has shrunk or firm can no longer meet customer expectations o It is important to understand how customers view a product, service or brand to successfully position it. THE COMPONENTS OF A BRAND A brand is comprised of both tangible and intangible elements. Contact points, how consumers encounter things and interact with an organization is very important. Often intangible elements such as associated services may be key in building customer loyalty toward a brand. A pleasant shopping environment may have a significant impact on a consumer s assessment of a brand. Other invisible or intangible elements may include how and where products are made. MARKETING COMMUNICATIONS AND BRAND EQUITY The ultimate objective for a brand manager is to have resonance between a brand and a customer, which can lead to close customer relationships and enhanced customer loyalty to a brand. Marketing communications must strive to create brand salience for the customer. Brand meaning is built on brand salience. Brand meaning consists of both performancerelated attributes related to functional needs and in some cases the social or psychological needs of the customer. Brand responses can be divided into two categories: Judgments customers make regarding the attributes of the product or service Consumers feelings toward the brand The Brand Equity Model Pyramid is shown in Figure

7 THE IMC PLAN Marketing communications is grounded in the overall marketing plan of the firm. The IMC plan must work toward the same overall objectives as the other elements of the marketing plan. Marketing objectives are set on specific metrics. A marketing plan has multiple sections and processes. Marketing Plan usually includes the following components: Situation Analysis Competitive Analysis Customer Research Marketing Objectives The above components are building blocks for IMC plan. The IMC component of the Marketing plan will include crucial elements such as: IMC Objective(s) Target Audiences Budget Communication tools to be used (based on goals and budget considerations) Methods to evaluate and control implemented plan COMMUNICATING ACROSS CULTURES Carefully consider standardization versus adaptation when developing global brands. Make sure packages and labels are legal and protect the product being shipped over long distances. Be aware of the complications that occur when trying to position products in global markets. Effective positioning is important in the international arena and must be included in the marketing plan when a firm expands into other countries. IMPLICATIONS FOR BRAND MANAGERS AND PUBLICITY DEPARTMENTS (Note to professors -- these materials are not in the text. They provide a method for you to summarize the chapter in a different way) Note the tricky relationship between a strong corporate image and bottom line profits. In 22

8 other words, be aware that it is difficult to use numbers to express the value of an effective image in an era where accountability is such a major concern. Recognize the value of the following items: An identifiable company logo A brand name that generates both recall and a favorable impression Quality family brands Brand equity Effective use of private labels Study the company s position, and the position of each individual product. Use the attributes of price, competition, use, quality, users, product class, or cultural symbols to identify the position that the company and its products hold. Then, make decisions about the following issues: Is this position where we thought we were? Is this the position we want? If we intend to change our position, where do we aspire to be? Which tactics will move the company and its products to the correct, appropriate, or desired position? REVIEW QUESTIONS 1. What is meant by the term brand? How is it different from brand equity? A brand is generally a name assigned to goods, or a service or group of complementary. Brand equity is the set of characteristics unique to a brand. It is the value that stakeholders assign to a brand over and above the value of an equal but unbranded product. 2. How does a brand help customers? How does it help the company behind the brand? A corporation s brand can help customers by: Providing assurance when they make purchase decisions of familiar products in unfamiliar settings. Providing assurance for purchases when there is little previous experience. Reducing search time in purchase decisions. Providing psychological reinforcement and social acceptance of purchase decisions. 23

9 A corporation's brand helps the company by: Making brand extensions easier. Being able to charge a higher price. Creating higher customer loyalty. Leading to more frequent purchases. Promoting positive word-of-mouth communications. Attracting quality employees. Causing the firm to be viewed more favorably by financial analysts. 3. Name five dimensions of brand value? Brand awareness Associations customers make with brands Attitudes customers have about the brand performance Brand attachment by the customer Brand activity how do customers use the brand? 4. What are four types of brand names? Overt names Implied names Conceptual names Iconoclastic names 5. What is the difference between brand equity and brand parity? Brand equity is the set of characteristics unique to a brand that provide value to the brand. In essence, the brand is different and better. Brand equity allows the company the opportunity to charge a higher price and retain a market share that is greater than would otherwise be expected for an undifferentiated product. Brand parity is the perception that there are no differences between major brands. 6. Why is brand equity important? How is it measured? Brand equity allows manufacturers to charge more for products, creates higher gross margins, provides power with wholesalers and retailers, captures additional retail shelf space, prevents erosion of market share, and is a weapon against consumers switching due to sales promotions. Brand equity is measured with brand metrics, which are measures of returns on branding investments. They track awareness, recall, and recognition, as well as intent-to-buy. 24

10 7. Describe the use of brand extension and flanker brand strategies. Brand extensions appear when the company uses an established brand name on goods or services that are not related to the core brand. Flanker brand strategies are the development of a new brand by a company in a good or service category it currently has a brand offering for. 8. How can one tell if a brand has potential for brand extension? 1. If the conviction for the parent brand is high, brand extensions are more likely to be successful. 2. When consumers have more experience with a brand, they are more likely to accept a brand extension. 3. If the reputation for quality in the parent brand is high, the extension is more likely to be successful. 4. If the brand has been extended successfully before, brand extensions are more likely to be successful in the future. 5. When a brand extension receives a high degree of marketing communications support, the extension is more likely to be more successful. 6. If retailers accept the brand extension, the extension is more likely to be successful. This is because retailer support can help push the product to customers. 7. If the degree of fi t between the brand and the brand extension is high, the extension is likely to be successful. An example of a fit extension would be using the Coke brand on a new soft drink, while an example of a low fit extension is using the Coke brand on a new automobile. 8. When preference for the parent brand is driven more by physical attributes than by brand name, brand extensions are less likely to be successful. 9. If the perceived risk with a trial of the brand extension is low, the brand extension is more likely to be successful. 10. If target consumers are more innovative, they will be more likely to accept a brand extension. 9. Name and describe three types of co-brands. The three types of co-brands are: 1. Ingredient branding, or placement of one brand within another brand. 2. Cooperative branding, which is a joint venture of two or more brands into a new product or service. 3. Complementary branding, which is the marketing of two brands together to encourage co-consumption or co-purchases. 25

11 10. How has private branding, or private labeling, changed in the past decade? How have competitors with private brands responded? Private branding, or private labeling, has changed in the past decade in the following ways: the quality levels of products have increased; the products are perceived as having high value; loyalty to stores has increased, allowing store managers to increase in-store or private lines; they can be used to differentiate retail outlets; private label companies have begun to advertise these differences; and store managers now devote more effort to creating quality in-store displays of- and packages for private brands. 11. What is brand positioning? Give examples of various types of positioning strategies. Product/brand positioning is a perception in the consumer s mind regarding the nature of a company and its products relative to the competition. In the past, Cadillac had a distinct market position for quality, and Crest for being a cavity fighting toothpaste. 12. What are the principal components of an IMC plan? IMC Objective(s) Target Audiences Budget Communication tools to be used (based on goals and budget considerations) Methods to evaluate and control implemented plan 13. What are four ways in which marketing communications can contribute to brand equity? How do the concepts of standardization and adaptation apply to products, brands names, and marketing strategies? The development of brand equity is a four step process that starts with identity, followed by meaning, response and finally relationship. Marketing managers must choose the strategy that fits the company and its products. There has been some resistance to more global or standardized brand names. INTEGRATED LEARNING EXERCISES 1. Websites are an important vehicle by which brands communicate with audiences. Access the websites of the following companies to get a feel for the intended brand position each one tries to project. Is the image projectedon the website consistent with the image portrayed in the company s 26

12 advertisements? How would you improve the website to make it more consistent or effective? a. Bell Mobility b. Johnson and Johnson c. RBC Financial d. McDonald s e. Canadian Student opinions will vary. This can be a good in-class discussion question, especially if the sites can be posted for students to see. 2. Social media such as Facebook are important tools for marketers who seek to create resonance between customers and a brand. These media allow for regular communications between the brand and its customers and also allow customers to interact with each other. Find a Facebook fan page for a consumer brand and one for a business-to-business brand. Do you think the companies are effectively utilizing the media to create resonance with customers? What features or content would you add to help increase the potential for resonance? Student opinions will vary. This can be a good in-class discussion question, especially if the sites can be posted for students to see. 3. Brand extension and flanker branding are common strategies for large corporations. Access the following Web sites. Identify the various brand extension strategies and flanker brands used by each company. Identify differences in the target audiences for each brand. a. Marriott Hotels ( b. Procter & Gamble ( c. General Motors ( d. The Gap ( Marriott includes Renaissance, Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites, SpringHill Suites, Marriott Vacation Club International, The Ritz Carlton, Marriott ExecuStay, and Marriott Executive Apartments. P & G's brands are noted in the chapter. In 2005, the company announced the acquisition of Gillette. General Motors has several different flanker brands geared towards different markets. Some of the brands under the GM umbrella include, Buick, Chevrolet and GMC. 27

13 GAP Inc. The company has five primary brands: the namesake GAP banner, Banana Republic, Old Navy,P iperlime and Athleta. 4. Sporting goods marketer Fozani Group operated as a retailer under several brand names, including Sport Chek, Sport Mart, Atmosphere, and Athletes World, to name a few (a complete list can be found at Do you agree with this approach? Perform an analysis of the Forzani brand strategy. As part of your analysis, discuss at least two benefi ts of this approach and two benefi ts that would be associated with reducing the number of brands, or even consolidating the outlets under one brand Student answers will vary. Student Project: Creative Corner The assignment is to develop a brand name and positioning strategy for a variety of products. Individual student answers will vary widely. Ethics in Action 1. Do you think a target of resonance or of fanatical devotion to a brand is an appropriate goal for marketers? What are three possible negative effects of consumers extreme devotion to brands? Student responses will differ. This is a good exercise for classroom discussion. 2. Find an example of an online brand community. Pose the question to members in the community to find out what value they receive from their membership in the community and why they belong. What are the top three reasons people offer for their membership? Student responses will differ based on the online source that they find. Case Study Can Zellers Be Canada s Target 1. Do you think the Target approach to branding and competing with Wal- Mart has potential for Zellers in Canada? Write a memo to the VP of Marketing for Zellers outlining an argument for or against a move toward such an approach. In particular, outline whether you think this approach will harm any of the other brands within the HBC portfolio. 28

14 Student responses will differ. The first part of this exercise is an excellent question for classroom discussion. 2. If Walmart owns the lowest price position in the category, where is the opportunity position Zellers? Develop a perceptual map that positions Zellers and Walmart on two axes that you think matter to the Canadian consumer. Student answers will vary. This is a good creative exercise that can have students forming small groups working together and making a short informal presentation to the class. 3. Building on your map from question 2, develop a 30-second television commercial script to deliver this message. Answer to this question we depend on the response(s) given in question Why do you think Zellers has been able to stay in business despite the presence of the Walmart brand in Canada? What aspects of the brand do you think have value for Canadian consumers? Prepare a 10-minute presentation with an analysis of which programs you think are most effective for Zellers, and which (if any) can be deleted from the company s strategy. Student responses will vary. 29