Tag: Brand Management Mumbai University BMS NOtes

Promotional strategy is a method used by companies to advertise, promote & sell their goods. A company chooses its promotional strategy based on factors like product type, marketing budget, target audience etc. It is a critical activity to increase product awareness & thereby increase sales. An effective promotional strategy gets more revenue as compared to the marketing spend.

Importance of Promotional Strategy

Promotion for any product or service is essential for any company. It is because only through promotion people would come to know about the product. Only after knowing about the product they consider purchasing. Since there are some many companies & brands competing to sell their products to the same set of customers, advertising & promotion are important tools to ensure each brand is differentiated & identified.

Promotional Strategy Types

All the promotional strategies can be classified under two categories; Push and Pull.

Push strategy

In push strategy promotional activities are done for the distributors, wholesalers and retailers to push the product to the consumers. Trade fairs, wholesaler discounts, bonus and all the activities which benefit the distributors are all examples of push strategies. Hence the demand is pushed or created in the distribution channel. These activities are not visible to consumers and hence it is mostly unknown to the customers.

Pull Strategy

In pull strategy promotional activities are done for the consumers. Advertisements, digital campaigns, discounts in stores etc are some examples of pull strategy. Hence demand is created in the consumers which in turn go to the retail stores or e-commerce websites to buy these products. These activities are visible to all the customers.

Promotional Strategy Steps

• Identify the objectives of promotion: This should be a quantifiable amount in terms of revenue, unit sales, increase brand awareness etc.
• Evaluate promotional channels: This involves evaluating the marketing channels required for promotion eg TV, social media, radio, events, trade fairs etc.
• Formulate a marketing budget. The amount investment required for driving a promotional strategy should be allocated channel wise. This would help in keeping track of investments.
• Execute promotional activities: This involves creation of advertising campaigns, scheduling advertisements and making sure that promotions are happening without disruptions.
• Monitor, measure & evaluate: All promotional activities must be monitored for effectiveness & evaluated for further improvement.

Strategies:

Throwing contests for promotion

This type of promotional strategy is quite frequently used by companies to make a place for their newly launched product in the market. you must have noticed many bloggers and YouTubers posting about their partnership with various brands and asking their customers to go do various tasks to get a chance to win the contest.

After-Sale Customer Survey

Reaching your customers through telephonic calls or emails or text messages to know about their experience shopping with you does three jobs:

• It makes your customers believe that you care for them.
• It open the doors for promotional activities.
• Your customer’s feedbacks can help you to improve your business.

Branded Promotional Gifts

This is an effective strategy used by many companies to promote their brand. In this strategy, rather than handing out the business card they print the business name, logo and contact information on a functional gift.

Customer Incentive Referral Program

This promotional strategy will use your current customers and encourage them to refer your products or services to their families and friends. You can offer them gifts or discounts on their next purchase in exchange for their referral. For example, many e-commerce companies run “Customer Incentive Referral Program” to increase their customer-base using their existing customers. this strategy is far less expensive than the traditional style of advertising.

Mail Order Marketing

Just think that your company is still breathing just because of your customers. once customers have used your product and liked it, there are chances that they are going to be connected with you for a long time. Therefore, don’t make a mistake to overlook these customers. you can ask them to share their personal details in exchange for free gifts or services. You can use that information to promote your product in a new market where people are totally unaware of the existence of your product.

Social Media

There are various platforms online where you can promote your products and can reach a huge number of audiences.  There is hardly any person who is not using either Facebook or Instagram. By using this platform, you can make people aware of your product. You can talk about its uses and how it is essential for them.

Free Product and sample Giveaways

This promotional strategy is used by both small as well as powerful companies. By using this strategy, you can boost the sale of your product instantly. This strategy is mostly adopted by food or cosmetic companies. They provide a sample of their products free of cost and make people try new products.

Point of Sale Promotion and End Marketing

In stores, products are displayed strategically so that they come first in the eyes of customers as soon as they enter the store. Stores do this for two reasons convenience and impulse. Many times, you have noticed a rack displaying attractively offers on a certain product or many products are displayed near the aisle of the store. There are reasons why stores do this. They do this either to boost the sale of the product or when they want their stock moving. This strategy makes people buy certain products impulsive while they wait for their turn to check out.

Causes and Charity

People want to connect with those companies which are giving back to society along with providing excellent services. Therefore, many small, as well as powerful companies, use this strategy to strengthen their customer base. To do this, you need to tie-up with some charity organization or an NGO and then you can advertise about your initiative on your social media handles, website, and in your stores so that people become aware of it and will buy your products to do their bit for the society. A classic example of this promotional strategy used by a stationery company “Classmate”. Classmate tells their buyers that they will pay “one rupee” for the education of unprivileged children for every product bought by you. This strategy makes the use of emotions of human beings to boost sales. There is no harm to give a try to this strategy.

Customer’s Appreciation Events

This type of strategy involves throwing a small party for your customers. this small gesture will not cost you as much as fancy advertisements will cost you, but it will definitely improve the loyalty of customers towards your brand. You can also organize small competitions where you can provide gift hampers to the winner or you can also give them a discount on their next purchase. To make this kind of event more attractive you can also offer food items like pizza, soft drinks or some other snacks. This will attract customers to your store. Make sure to display products that you want to promote strategically so that it comes in the eyes of people.

Brand equity refers to the value of a brand and is determined by consumers’ perception of the brand. Brand equity can be positive or negative. If consumers think highly of a brand, it has positive brand equity.

On the other hand, if the brand consistently under-delivers, fails to live up to consumer expectations, and generates negative word of mouth, it has negative brand equity. Simply put, brand equity is the reputation of a brand.

Pricing is the one strategy that moves the least as a strategy. If it moves at all. And that in itself is strange; knowing that it is the most impactful element in a company’s revenue delivery.

Price of a product or service is an important signal sent to the consumer. It is and rightly should be a supporting lever to the equity of the brand. It is a signal that labels whether your product is cheap, affordable, expensive, exclusive, for you, not for you, for everyday, for special occasions etc. Consumers’ psychology is such that price comes with a lot of baggage based on previous experience with your product, or potentially previous experience with a competitive product. It is immediately put in the wider competitive set, and, relayed back to money available in the wallet (our on the visa) at the time of purchase. All of this makes price setting a complicated matter.

Power of Pricing

Pricing at both ends of the strategy spectrum can affect brand equity in different ways. Premium pricing is the principle of setting a high price point to reflect the product’s exclusivity and quality. With niche brands, such as Chanel, Mercedes Benz or Rolex, the price is an aspect that the customers of the brand enjoy. It adds meaning and value to their purchase and sets the product apart from its competition. This makes the pricing strategy an important and integral aspect of the product’s brand equity. If the product doesn’t have any other strong differentiators, however, lower prices are likely to sell better than more expensive ones.

Everyday Low Pricing

This pricing strategy is the official positioning of most grocery store chains. Walmart successfully follows this strategy, which is imitated by stores in other countries. The chain’s approach of profitable and sustainable price differentiation has become a winning strategy and created significant brand equity, positioning the company as a low price, high value retailer. In addition, brands that successfully move into developing markets with a large number of less affluent customers, such as China and India, have their brand equity directly affected by the affordability of their products to the target market.

Discounted Pricing

Businesses usually adopt a strategy of differentiation or price leadership. Differentiation works for companies operating in luxury or niche markets, while price leadership works for discount stores. The effect of a discount or competition pricing strategy can create an image of second-rate products, which could have a negative effect on the brand’s equity. For example, Europe’s leading low-cost airline, Ryanair, created new routes to smaller airports to save on landing fees, which serve areas not covered by traditional airlines. This alienated some customers, but gained brand equity for the company in other target markets.

Value based pricing

Value-based-pricing is much more complex than any other pricing strategy. You need to understand consumer price psychology before you can make a call. And that leads to a need to change systems that lead to pricing decisions dramatically.

In marketing, brand management begins with an analysis on how a brand is currently perceived in the market, proceeds to planning how the brand should be perceived if it is to achieve its objectives and continues with ensuring that the brand is perceived as planned and secures its objectives. Developing a good relationship with target markets is essential for brand management. Tangible elements of brand management include the product itself; its look, price, and packaging, etc. The intangible elements are the experiences that the target markets share with the brand, and also the relationships they have with the brand. A brand manager would oversee all aspects of the consumer’s brand association as well as relationships with members of the supply chain.

History

The earliest origins of branding can be traced to pre-historic times. The practice may have first begun with the branding of farm animals in the middle East in the neolithic period. Stone Age and Bronze Age cave paintings depict images of branded cattle. Egyptian funerary artwork also depicts branded animals. Over time, the practice was extended to marking personal property such as pottery or tools, and eventually some type of brand or insignia was attached to goods intended for trade.

A number of archaeological research studies have found extensive evidence of branding, packaging and labelling in antiquity. Archaeologists have identified some 1,000 different Roman potters’ marks of the early Roman Empire, suggesting that branding was a relatively widespread practice.

In Pompeii (circa 35 CE), Umbricius Scauras, a manufacturer of fish sauce (also known as garum) was branding his amphora which travelled across the entire Mediterranean. Mosaic patterns in the atrium of his house were decorated with images of amphora bearing his personal brand and quality claims.

Not all historians agree that the distinctive packages and markings used in antiquity can be compared with modern brands or labels. Moore and Reid, for example, have argued that the distinctive shapes and markings in ancient containers should be termed proto-brands rather than seen as modern brands according to our modern understanding. A proto-brand is one that possesses at least one of three characteristics; place information about the origin of manufacture-expressed by a mark, signature or even by the physical properties of the raw materials including the packaging materials, performs a basic marketing function such as storage, transportation and assortment; and quality attributes- information about the product’s quality expressed by the name of the manufacturer, place of origin or ingredients or any other generally accepted indicator of quality.

The impetus for more widespread branding was often provided by government laws, requiring producers to meet minimum quality specifications or to standardize weights and measures, which in turn, was driven by public concerns about quality and fairness in exchange. The use of hallmarks, applied to precious metal objects, was well in place by the 4th century CE in Byzantium. Evidence of marked silver bars dates to around 350 CE, and represents one of the oldest known forms of consumer protection. Hundreds of silver objects, including chalices, cups, plates, rings and bullion, all bearing hallmarks from the early Byzantine period, have been found and documented. Hallmarks for silver and gold were introduced in Britain in 1300.

Branding Terminology

Brand associations refers to a set of information nodes held in memory that form a network of associations and are linked to a key variable. For example, variables such as brand image, brand personality, brand attitude, brand preference are nodes within a network that describes the sources of brand-self congruity. In another example, the variables brand recognition and brand recall form a linked network that describes the consumer’s brand awareness or brand knowledge.

Brand attitude refers to the “buyer’s overall evaluation of a brand with respect to its perceived ability to meet a currently relevant motivation”.

Brand Trust refers to whether customers expect the brand to do what is right. 81% of consumers from different markets identified this as a deciding factor in their purchases.

Brand awareness refers to the extent to which consumers can identify a brand under various conditions. Marketers typically identify two distinct types of brand awareness; namely brand recognition and brand recall.

Brand Recognition refers to how easily the consumers can associate a brand based on the company’s logo, slogan, color scheme, or other visual element, without seeing the company’s name.

Brand equity Within the literature, it is possible to identify two distinct definitions of brand equity. Firstly an accounting definition suggests that brand equity is a measure of the financial value of a brand and attempts to measure the net additional inflows as a result of the brand or the value of the intangible asset of the brand. A different definition comes from marketing where brand equity is treated as a measure of the strength of consumers’ attachment to a brand; a description of the associations and beliefs the consumer has about the brand.

Brand image refers to an image an organization wants to project; a psychological meaning or meaning profile associated with a brand.

Brand loyalty refers to the feelings of attachment a consumer forms with a brand. It is a tendency of consumers to purchase repeatedly from a specific brand.

Brand personality refers to “the set of human personality traits that are both applicable to and relevant for brands”.

Self-brand congruity draws on the notion that consumers prefer brands with personalities that are congruent with their own; consumers tend to form strong attachments with brands where the brand personality matches their own.

Brand preference refers to “consumers” predisposition towards certain brands that summarize their cognitive information processing towards brand stimuli”.

Requirements of a Brand Manager

A brand manager is tasked with managing the tangible and intangible properties of a brand. The tangible aspects of a company’s brand include the product’s price, packaging, logo, associated colours, and lettering format.

A brand manager’s role is to analyze how a brand is perceived in the market by taking the intangible elements of a brand into account. Intangible factors include the experience that the consumers have had with the brand and their emotional connection with the product or service. The intangible characteristics of a brand build brand equity.

Brand equity is the price above the product’s value that consumers are willing to pay to acquire the brand. Brand equity is an internally generated intangible asset in which its value is ultimately decided by consumers’ perception of the brand. If consumers are willing to pay more for a brand than a generic brand that performs the same functions, the brand equity will increase in value. On the other hand, the value of brand equity falls when consumers would rather purchase a similar product that costs less than the brand.

Brand and product are among the basic factors for a company to achieve and maintain a competitive position in the market. The customers use these factors to differentiate and choose the solutions to their problems offered by different manufacturers and/or sellers.

Brand:

A brand is a difference between just a car and a Mercedes. A brand is what people feel about a particular company and its products, services or ideas. Branding is about emotions, and it is how customers feel about a company, it provides market authority to companies. Brands are focused on a specific agenda; they stand for something. For example, the brand slogan of Coca-Cola is “open happiness”. To simplify things further, a brand is the image of a particular product that tells a story about the product. A Brand is value addition to the base value of a product.

The brand is not just a name but an image in the minds of the customers. The image is associated with reliability, credibility, and quality that gives a sense of satisfaction to the customers. The legal identity of a brand is known as a trademark.

Factors that contribute toward building a brand:

• Personality: It is essential to display the character of a brand.
• Uniqueness: Brands must be built on an original idea.
• Reliability: A brand needs to be trustworthy.
• Consistency: No brand can survive without consistently engaging their customers.
• Presence: Branding is all about having a bold presence and visibility.
• Competitiveness: A brand should be able to provide competitive value.

Product:

A product is a commodity, merchandise or deliverable. Goods, services, ideas or anything that offers a solution to a problem are products. Product is sold to customers, and it is something buyers will pay to make a purchase. Generally, Products are classified in accordance with the service they provide or the brand they belong to.

Every product is different in itself regarding size, colour, brand name, shape, packaging, features, after sales services and much more. However, the difference in the product is psychological, not physical. These factors are more or less used by the companies to persuade customers to buy their product. e.g., sunglasses, Handbags, jeans, , belts, shoes, etc.

Components of a product:

• Key benefits: Every product must offer a core value or values.
• Availability: Consumers must have easy access to a product.
• Consumable: A product is consumable if a customer can derive the benefits from it.

Difference:

Brand forms an important part of product strategy. Brands can convey several meanings to buyers. For example, Nike stands for trendy, quality and well-engineered products.

Brands have been around for many years since business began. The managers thought about branding once the product was developed, priced and packaged. Branding a product was a decision in the end and was never given any significance as they felt that good product will generate sales automatically.

A brand is a perceptual entity that is rooted in reality but reflects the perceptions and perhaps even the idiosyncrasies of consumers. Ultimately a brand is something that resides in the minds of consumers. Therefore, the scope of branding expands beyond boundaries.

To successfully brand a product it is necessary to teach consumers:

• Who the product is.
• What the product does.
• Why consumers should choose that particular brand.

A branding strategy shall be considered successful only when the consumers have an answer to the above three questions which is strong enough to make them believe that there are significant differences in the products or services provided by a brand than others. Making sure the above three takes deep understanding of consumer and therefore the scope of branding becomes critical

The concept of branding can be applied to:

• Services; e.g. Indigo Airlines, ICICI Bank etc.
• Physical Goods; e.g. Parle-G biscuits, Tata Tea, Maruti SX4 etc.
• Stores; e.g. Future Retail, Central, 99 Store, Amazon etc.
• Place; e.g. Gujrat Tourism, Incredible India etc.
• Person; e.g. Sachin Tendulkar, Amitabh Bacchhan etc.
• Idea; e.g. abortion rights, free trade, or freedom of speech
• Organization; e.g. The Rolling Stones

Role of Brands

A brand is a product or service which help the organisation differentiate their products or services from others. The role of brand come in critical for the organisation as it translates into loyalty and higher margins in the long run.

The differentiation of a brand can be:

Related to Product Performance: e.g. Gillette, Merck, Sony, 3M

• Rational
• Functional
• Tangible

Related to Brand Identity: e.g. Coca-Cola, Calvin Klein, Gucci, Tommy Hilfiger, Marlboro

• Emotional
• Symbolic
• Intangible

Benefits of Brand for the firm

• For a firm, the brand provides legal protection towards unique features or aspects of the product.
• Firms can charge a premium for owning a brand boosting profit on every sale.
• Brand loyalty helps organization to retain their existing customers when diversifying from one line of products to other. It provides security of demand and creates barrier for other manufactures to easily tap existing customers.
• Product can be copied, but brand cannot. Once a brand is established, it’s the invaluable asset for an organization.
• A well-established brand adds towards the overall value of the firm while calculating its net worth.

Benefits of Brand for the consumer

• Experience of customers with products of same brand help them to quickly decide whether they will want to go with their purchase decision or not making their decision easier.
• It helps to identify the source of manufacturer of the product and simultaneously assigns a responsibility towards an organization for the branded product.
• Brands bring with them a certain level of quality assurance.

The strategic brand management process involves the design and implementation of marketing programs and activities to build, measure, and message brand equity.

Developing a strategy that successfully sustains or improves brand awareness, strengthens brand associations, emphasizes brand quality and utilization, is a part of brand management.

Strategic brand management process is important for creating and sustaining brand equity. Developing a strategy that successfully sustains or improves brand awareness, strengthens brand associations, emphasizes brand quality and utilization, is a part of brand management.

This process creates a wide awareness of the brand and strengthens the brand association. Proper branding helps the company in differentiating its products from other competitors. It helps in attracting more customers and persuades them to buy the product. All this assists in developing a better relationship with the target market and builds a loyal customer base.

Brand management includes tangible elements like product, its price, its shape and color, packaging, etc. It also comprises of intangible elements like brand image, brand equity, band positioning, and associations.

Strategic Brand Management Process has four main steps:

• Identify and Establish Brand Positioning and Values.
• Designing and implementing brand marketing programs.
• Measuring and interpreting brand performance.
• Growing and sustaining brand equity.

Identify And Establish Brand Positioning and Values

The brand management process starts with identifying and understanding the position of brand that should be established. This step involves developing a company’s offers and images to counter the competition. Brand should be capable of distinguishing the company among its competitors and should affect target customers’ minds.

Identification and planning of brand use three models: Brand positioning model that tells how to maximize competitive advantages from integrated marketing, Brand resonance model that tells how to develop loyalty relationship with customers and Brand value chain which traces the brand’s value creation process.

Plan and Implement Brand Marketing Programs

Building brand equity requires creating a brand that consumers are acceptable aware of and with which they have favourable, strong and unique brand associations.

Mixing and matching of brand elements

Brand elements, also known as brand identities, are those trademark that serves to identify and differentiate the brand from its competitors. Different brand elements here are brand names, URLs, logos, symbols, logos, images, packaging, slogans, etc.

Brand elements help to facilitate the formation of strong, favourable, and unique brand associations, enhancing brand awareness and elicit positive judgments and feelings about a brand.

Integrating brand marketing activities

Marketing program activities and product, price, distribution, and marketing communication strategies make the biggest contributions and can create strong, unique and favourable brand associations in a variety of ways.

Leveraging Secondary Associations

Marketer tries to associate a brand with certain source factors such as countries, characters, sporting or cultural events in the mind of the consumer and leveraging these associations for the brand to improve its brand equity.

Different source to leverage secondary brand associations by linking the brand are:

• Companies (through branding strategies)
• Countries (through the identification of product origin)
• Channels of distribution (through channel strategy)
• Other brands (through co-branding)
• Characters (through licensing)
• Spokespersons (through endorsements)
• Events (through sponsorship)
• Other third-party sources (through awards or reviews)

Measure and Interpret Brand Performance

To understand the effects of brand marketing programs, it is important to measure and interpret brand performance.

Brand Audit

Brand Audit is a comprehensive examination of the brand and uncovers its sources of equity to suggest ways to improve and leverage it.

• Brand inventory (supply side): A current comprehensive profile of how all the products and services sold by a company are branded and marketed.
• Brand exploratory (demand side): Provides detailed information as to how consumers perceive the brand.

Brand tracking studies

Collect information from the customer about brand performance on a number of key dimensions marketers can identify in the brand audit or other means.

Brand Value chain

A brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the way marketing activities create brand value. It helps to better understand the financial impacts of brand marketing investments and expenditures.

Brand Equity Measurement System

A Marketer’s tools or set of research procedures designed to provide, accurate, actionable and timely information to make the best possible tactical decisions in the short and long run.

• Brand equity charter: It formalizes the company view of brand equity into a document and provides general guidelines to marketing managers within the company as well as key marketing partners outside the company.
• Brand equity report: Assembles the results of the tracking survey and other relevant performance measures.
• Brand equity responsibilities: Senior management must be assigned to oversee how brand equity is treated within the organization.

Growing and Sustaining Brand Equity

The next step involves growing and sustaining brand equity. Maintaining and expanding brand equity can be quite challenging.

Captures the branding relationship between the various products /services offered by the firm using the tools of a brand-product matrix, brand hierarchy and brand portfolio.

• Brand portfolio is the set of different brands that a particular firm offers for sale to buyers in a particular category.
• Brand hierarchy displays the number and nature of common and distinctive brand components across the firm’s set of brands.

Managing Brand Equity over time

Marketer’s ability to take a long -term perspective as well as a short-term perspective of marketing decisions as they will affect the success of future marketing programs.

• Reinforcing Brands: Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand to consumers in terms of brand awareness and brand image.
• Revitalizing Brands: Revitalizing a brand requires either that lost sources of brand equity are recaptured or new sources of brand equity are identified and established.