Marketing Communications - Chapter 2 ppsx

Marketing Communications Challenges: CHAPTER 2 Enhancing Brand Equity, Influencing Behavior, and Being Accountable © 2010 South-Western, a part of Cengage Learning All rights reserved Eighth Edition PowerPoint Presentation by Charlie Cook The University of West Alabama Chapter Objectives After reading this chapter you should be able to: 1 Explain the concept of brand equity from both the company’s and the customer’s perspectives 2 Describe the positive outcomes that result from enhancing brand equity 3 Appreciate a model of brand equity from the customer’s perspective 4 Understand how marcom efforts must influence behavior and achieve financial accountability © 2010 South-Western, a part of Cengage Learning All rights reserved 2–2 Introduction: Framework for Marcom Process Fundamental Decisions Implementation Decisions Desired Outcomes Evaluation and Corrective Action © 2010 South-Western, a part of Cengage Learning All rights reserved 2–3 Basic IMC Issues Marketing Communicators How to enhance brand equity How to affect customer behavior © 2010 South-Western, a part of Cengage Learning All rights reserved How to demonstrate financial accountability How to justify marcom investments 2–4 Basic IMC Issues • What can marketing communicators do to enhance the equity of their brands? • How can marketing communicators affect the behavior of their present and prospective customers? • How can marketing communicators justify their investments in advertising, sales promotions, and other marcom elements? • How can marketing communications demonstrate financial accountability? © 2010 South-Western, a part of Cengage Learning All rights reserved 2–5 Brand • Brand  Is a name, term, sign, symbol, or design  Identifies and differentiates goods and services of one seller or group of sellers from those of the competition  Communicates a particular set of values • Brand Equity  Can be considered either from the perspective of the organization that owns it or from the vantage point of the customer  Is valuable when consumers believe the brand can © 2010 South-Western, a part of deliver on its promises Cengage Learning All rights reserved 2–6 A Firm-Based Perspective on Brand Equity Effects of Brand Equity Increases Higher market share Increased brand loyalty © 2010 South-Western, a part of Cengage Learning All rights reserved Premium pricing Revenue premiums 2–7 Table 2.1 Children’s Taste Preferences (In percents) © 2010 South-Western, a part of Cengage Learning All rights reserved 2–8 Brand Equity Increases • Revenue Premium  The revenue differential between a branded item and a corresponding private labeled item  Revenue premium for a branded item (b) compared to a private label (pl) = (volumeb)(priceb) – (volumepl)(pricepl) © 2010 South-Western, a part of Cengage Learning All rights reserved 2–9 Figure 2.1 A Customer-Based Brand Equity Framework © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Adapted from Kevin Lane Keller, “Conceptualizing, Measuring, and Managing Customer-Based Brand Equity,” Journal of Marketing 57 (January 1993), 7 2–10 Ways of Enhancing Brand Equity Enhancing Brand Equity Speak-for-Itself Message-Driven © 2010 South-Western, a part of Cengage Learning All rights reserved Leveraging 2–15 Figure 2.3 Leveraging Brand Meaning from Various Sources © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Kevin Lane Keller, “Brand Synthesis: The Multidimensionality of Brand Knowledge,” Journal of Consumer Research 29 (March 2003), 598 By permission of the University of Chicago Press 2–16 Types of Branding for Leveraging • Co-Branding  A partnership between two brands • Ingredient Branding  Inclusion of one brand within the other © 2010 South-Western, a part of Cengage Learning All rights reserved 2–17 What Benefits Result from Enhancing Brand Equity? • Increased consumer loyalty • Long-term growth and profitability for the brand • Maintain brand differentiation from competitive offerings • Insulate brand from price competition © 2010 South-Western, a part of Cengage Learning All rights reserved 2–18 Measuring World-Class Brands Evaluating World-Class Brands Quality Salience © 2010 South-Western, a part of Cengage Learning All rights reserved Equity 2–19 Characteristics of a World-Class Brand • Delivers benefits consumers want • Brand helps build brand equity • Stays relevant • Good positioning • Brand’s managers understand what the brand means to consumers • Consistency • Support over long run • Fits into brand portfolio • Monitoring of the sources of brand equity • Price equals value © 2010 South-Western, a part of Cengage Learning All rights reserved 2–20 Table 2.2 Top Ten World-Class Brands Overall (Among 1,030 total brands included in EquiTrend’s Spring 2006 survey) © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Spring 2006 EquiTrend brand study by Harris Interactive, http://www.harrisinteractive.com/news/allnewsbydate.asp?NewsID=1063 (accessed July 26, 2007) 2–21 Table 2.3 Interbrand’s Top 20 Global Brands, 2007 © 2010 South-Western, a part of Cengage Learning All rights reserved Source: Interbrand Report, “Best Global Brands 2007,” http://www.interbrand.com/best_brands_2007.asp 2–22 Affecting Behavior and Achieving Marcom Accountability • The Importance of Brand Awareness  Creating brand awareness and boosting brand image serve little positive effect unless individuals make purchases or engage in desired behaviors  Marcom’s objective is ultimately to affect sales volume and revenue © 2010 South-Western, a part of Cengage Learning All rights reserved 2–23 Measuring Marketing Investment Performance • Return on Marketing Investment (ROMI)  Measures the effect of marcom, or of its specific elements such as advertising, in terms of whether it generates a reasonable revenue return on the marcom investment • Why Measure Marcom Effectiveness?  Demands for greater accountability on the marketing function  To become better at marcom activities © 2010 South-Western, a part of Cengage Learning All rights reserved 2–24 Measuring Marketing Investment Performance • Difficulties in Measuring Marcom Effectiveness  Choosing an appropriate metric  Gaining agreement on measures  Collecting accurate data for marcom assessment  Determining effects of specific marcom elements © 2010 South-Western, a part of Cengage Learning All rights reserved 2–25 Difficulties in Measuring Marcom Effectiveness: Choosing a Metric What to Measure? Change in brand awareness Improvement in attitudes toward the brand © 2010 South-Western, a part of Cengage Learning All rights reserved Increased purchase intentions Larger sales volume 2–26 Difficulties in Measuring Marcom Effectiveness: Gaining Agreement • Finance Departments’ Measures of Success:  Discounted cash flows  Net present values of investment decisions © 2010 South-Western, a part of Cengage Learning All rights reserved • Marketing Departments’ Measures of Success:  Measures of brand awareness, image, and equity 2–27 Difficulties in Measuring Marcom Effectiveness: Collecting Accurate Data and Calibrating Special Effects • What exact sales figures should be used to calculate sales? • How much relative effect does each program element have on sales volume compared to the effect of other elements? © 2010 South-Western, a part of Cengage Learning All rights reserved 2–28 Measuring Marcom Effectiveness • Marketing-Mix Modeling  Employing econometric statistical techniques to estimate the effects that elements of the marcom mix have in driving sales volume • Example: © 2010 South-Western, a part of Cengage Learning All rights reserved 2–29 ... July 26 , 20 07) 2? ? ?21 Table 2. 3 Interbrand’s Top 20 Global Brands, 20 07 © 20 10 South-Western, a part of Cengage Learning All rights reserved Source: Interbrand Report, “Best Global Brands 20 07,”... © 20 10 South-Western, a part of Cengage Learning All rights reserved 2? ? ?20 Table 2. 2 Top Ten World-Class Brands Overall (Among 1,030 total brands included in EquiTrend’s Spring 20 06 survey) © 20 10... Speak-for-Itself Message-Driven © 20 10 South-Western, a part of Cengage Learning All rights reserved Leveraging 2? ??15 Figure 2. 3 Leveraging Brand Meaning from Various Sources © 20 10 South-Western,