chapter 12: strategic considerations in marketing communications
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Chapter 12: Strategic Considerations in Strategic Considerations in Marketing CommunicationsMarketing Communications
©2010 Pearson Education, Inc. publishing as Prentice Hall
How is the term brand perceived by marketers versus customers?
What advantages and risks are associated with a strong brand?
How does a firm build a strong brand? What are the issues involved in ingredient branding?
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When should a company pre-announce new products?
What are the pros and cons of pre-announcing?
What are the tactical issues involved in pre-announcing?
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Strategic brand management is critical to establish/nurture corporate identity
The 2008, Interbrand, top 10 global brands:
6. Toyota
7. Intel
8. McDonald's
9. Disney
10. Google
1. Coca-Cola
2. IBM
3. Microsoft
4. GE
5. Nokia
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Brand: a name, term, symbol, or design ◦Protected through registered trademarks◦Intangible asset = adds value to company
Identify/differentiate goods and services of one seller from another
Allows a company legal protection for its products
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To a marketer a brand refers to:
◦Awareness and reputation in a marketTo a customer, a brand represents:
◦A promise of specific product performance◦Company must deliver on “moments of truth”
Each interaction a customer has with the company, its products, its brand
◦Emotional connection with the company/product
◦A symbol of customer’s self-image
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Branding Strategies: specific activities to create awareness and prominence in the market
Brand elements- logos, symbols, slogans Usage experience Associations with other entities Internal communication with employees Customer service/support
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Drivers of Brand AttitudeDrivers of Brand AttitudeChanges in innovation road map
New blockbuster products enhance, while failure to innovate erodes brand attitude
Changes in top management
CEO identity and persona
Competitor actions
Hard-hitting, direct comparison can negatively impact brand attitude
Legal actionsMay negatively effect brand attitude
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Brand Equity: power of a brand to positively affect consumer response to marketing
Three key drivers of brand equity:
1.Customer brand awareness
2.Customer brand attitude
3.Customer perceptions of brand ethics
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Advantages Disadvantages• Command premium prices • Can be expensive• Strong impact on consumer behavior • Trigger backlash if
actions are inconsistent with brand message
• Bestow credibility• Send signal of product quality• Facilitate entry into new markets • Long-term commitment• Reduce risk with new initiatives• Positive return in financial performance• Earn higher margins• Attract high-quality employees• Elicit support from partners• Gain licensing opportunities
For CompaniesFor Companies
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For CustomersFor Customers
Advantages Disadvantages
• Provide a decision-making heuristic • Can become angry if
company doesn’t live up to promises• Provide a signal of safety, or
pledge of quality
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Branding is more important for high-tech than incremental products/innovations
Brand awareness and strong brand image require well-designed/funded marketing programs
Branding strategies must be viewed as long-term investments
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High-tech services
◦Nature of services: intangibility and variability
◦Branding may make abstract nature of service more concrete
◦A brand can help identify the services provided by the firm
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• Create a steady stream of innovations with strong value proposition
• Emphasize advertising (rather than price promotions) to create awareness and brand image
• Effectively harness Web 2.0 technologies and new media
• “Influence the influencers” and stimulate word of mouth
• Think strategically about corporate social responsibility (CSR) efforts
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• Brand the company, platform, or idea• Rely on symbols or imagery to create
brand personality• Engage in internal branding to enlist the
support of all company personnel
• Effectively manage all points of contact (“touch points”) with customers
• Work with partners (co-branding and ingredient branding)
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Don’t brand the individual product (overbrand)
◦Prohibitively expensive
◦Makes it difficult for customers to develop product or brand loyalty Causes confusion
Brand Hierarchy◦ Includes company name, technology platform, and
then the product
◦Example: Microsoft Vista Windows
©2010 Pearson Education, Inc. publishing as Prentice Hall
Beneficial at the corporate level
Provides stability
Helps establish a presence in financial markets
The brand must have trustworthiness, especially in the high-tech arena
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Customers commit to a long-term relationship, the corporate brand should be strong, enduring
More options:◦Family names/umbrella brands ◦Brand the idea
Use distinct brands for different product platforms
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Have a brand strategy that provides a roadmap for the future◦The company with the best technology does
not always win
Know that brands are owned by customers, not developers/engineers◦Tech companies often do not invest in
building strong brands, though they should
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Rapid pace of innovation demands that companies stay in tune with their internal and external environments
Invest the time to understand the technology and value proposition; don’t be afraid to ask questions◦Marketers must be educated in the technology
to build credibility with the developers/engineers and customers
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Supplier
OEM/ManufacturerRetailer
Customers
-raw materials-components-production equipment-services
-personal consumption-business use
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Pulls demand from end users through the distribution channel back to the original equipment manufacturers (OEMs)
◦OEMs feel pressure to use the branded ingredient on the goods they make
Stimulates derived demand
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Ingredient supplier provides cooperative advertising dollars to OEMs◦Typically provided as percentage of revenue
for product◦OEMs feature the “ingredient” or component
in their own ads for their own products
Makes sense when the supplier’s “ingredient” is integrally related to the performance capabilities of the end-product
©2010 Pearson Education, Inc. publishing as Prentice Hall
ADVANTAGES
Brand awareness creates a competitive advantage in the marketplace for the ingredient supplier
For a small OEM, co-branding can◦ strengthen its brand credibility◦ provide incremental advertising dollars
©2010 Pearson Education, Inc. publishing as Prentice Hall
DISADVANTAGES Expensive for supplier Halo effect: supplier’s/OEM’s reputation may be
tarnished if OEM/supplier experiences product or performance problems
Erode ability of OEM to differentiate its product –particularly when lesser-known brands use the same ingredients
Supplier and OEM may not share the same goals Ingredient supplier may attempt to enter OEM’s
marketplace in the future
©2010 Pearson Education, Inc. publishing as Prentice Hall
No-brand strategy◦ Have customers resell product under their brand
name
Creativity is crucial for attracting attention to the product
Piggyback on brand names of larger companies by leveraging business relationships
Acquire or license a brand name
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Announcement of new high-tech products and innovations before they are ready for the market
Signals the firm’s future intentions
Appealing tool for strategic marketing communications
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“Vaporware” Products announced early that are slow or
fail to materialize◦“Yesterday’s technology tomorrow” ◦Undermines the credibility of the high-tech
firm◦May result in negative publicity
©2010 Pearson Education, Inc. publishing as Prentice Hall
PROS CONSPioneering advantage: preempt competitors, create entry barriers
Cue competitors
Stimulate demandCannibalize current
products
Encourage customers to delay purchasing
Confuse customers
Help customers plan Create internal conflict
Gain customer input, feedbackGenerate anti-trust
concerns
Stimulate development of complementary products
Product delays damage reputation or jeopardize
firm survivalProvide access to distribution
Increased value to shareholders
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Timing
Nature & Amount of Info
CommunicationVehicles
Target Audience
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EARLIEREARLIER Complements are
necessary for success
Highly novel/ complex products
Long buying process High switching costs
Timing*
LATERLATER Threat of
competitors Product features are
frozen late in the process
Minimize risks of cannibalization
*Regardless, the pre-announcement must coincide with the customer purchase
cycle
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How much?
What kind?◦Reveal product attributes? ◦Reveal how product works? ◦Reveal how it compares to existing
products? ◦Reveal pricing/delivery?
Information
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Trade shows Advertisements Press releases Press conferences
CommunicationVehicles
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◦Customers◦Competitors◦Distributors◦Partners
Target Audience
◦Shareholders◦Employees◦Industry Experts◦Media
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Avoid Pre-Announcements When:
Cannibalization might be high◦Firm has strong portfolio of products◦Customers would postpone current
purchases
Firm is large and might be accused of predatory intent
©2010 Pearson Education, Inc. publishing as Prentice Hall
Pre-Announcements are Useful: When firm has low market dominance
◦Faces lower cannibalization risks◦Faces fewer antitrust concerns
When firm believes competitors not likely to respond
To advance the customer decision process◦Product requires customer learning or
customers face switching costs
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Chapter Features Opening Vignette: Samsung’s global
branding strategy Technology Expert: Foveon (chip/image
sensor for digital cameras) Technology Tidbit: IDE treadle pumps End-of-Book Case: Xerox, Goomzee, SELCO-
Solar Power in India
©2010 Pearson Education, Inc. publishing as Prentice Hall
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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