Download - What are brands good for
Disaggregation or differentiated marketing -Involves segmenting a market into distinct groups. It helps the company in marketing each product to a group that is likely to buy it, thereby increasing the company’s chances of financial success.
Aggregation or undifferentiated marketing - It
is the opposite market strategy. Instead of segmenting the market into various groups, aggregation involves treating all consumers as if they are the same.
Analysis Of Brands-Aggregating Markets
• Promises to deliver a clearly stated benefitthat sets it apart from the competitors
• Most valuable assets for many Companies
• Establishes differentiated value proposition
• Builds relationship with Consumers
• Advertising and promotion of brands drivetraffic and sales volume
Brands have become the
focal point
of manycompany’s marketing efforts and are seenas a source of market power, competitiveleverage and higher returns.
BUT
The information revolution is making
consumer disaggregation vastly moreefficient and profitable than Aggregation
Analysis Of Disaggregating Markets
• Companies are developing means of interactingwith the consumers at the segment or evenindividual level like direct marketing, one-to-onemarketing and information based marketing
• Many of the strategic and tactical tasksentrusted to brands can be performed better, lessexpensive and more profitably at the level ofconsumer segments
Companies employing Disaggregatemarketing are :
• Following Two Way Flow Of Communication
• Quicker to respond to Consumer Needs & Tailortheir Offerings to influence consumer buyingpattern
Consumer Relationship1
• Communication Costs are dramatically reduced
• Hit rates increased through efficient targeting
• Targeting consumers with marketing communication only after their permission and only when they are likely to buy leads to increase in consumer satisfaction
Launched the magazine Food &Family, which delivers food-relatedarticles, recipes, editorials andadvertisements. It reaches the registeredconsumers’ mailbox quarterly(segmentation). It is personalized to theindividual consumer (disaggregation).
It has been launched as an effort to buildconsumer relationships
Cost Of Program
They are set against the benefits of reaching Kraft’s most loyal & profitable consumers in a targeted manner, providing opportunities to communicate directly with them outside of traditional channels. Some costs are defrayed by Third party advertisers like Ford, Tupperware, etc which are keen to tap into such targeted exposure for their brands.
Two Central Facts Of
Disaggregation
1) Locus of consumer relationship likely to shift from product brands toward a trusted and credible umbrella brand or even to the brand that is used as the platform for communications
2) Tactical activities such as competitive reactions, product-trial coupons and selective promotions are implemented with targeted consumers or segments rather than at the brand level
Key Differences
Aggregation Marketing: Brands and Brandmanagers compete which each other forscarce budget; Mass media communication
Disaggregation Marketing: Manages theconsumers & consumer segmentsprofitably; Brands become team players
Retailers’ Power
• Due to Large Size and Power
• Transformation from Location basedapproach to adopting a relationship-based approach
• Creates store-brand awareness
• Promote Private Label
• Building Store Loyalty
Marketers spent double on retailers’ listingfees, facing fees, trade promotion andcooperative advertising
BUT
The real THREAT is that they are feedingtheir potential rivals for the consumerrelationship
Disaggregation provides manufacturersnew medium to influence consumerdecision that is independent of the retailer.
It helps restore credibility to themanufacturer’s claims to know andunderstand the consumer better thanretailers do
BUT
Manufacturers must act quickly as
Consumers prefer few relationship to many
Retailers are not sitting IDLE
Retailers used brands like Coca Cola and Tide as magnets to attract customers to the store…
But once the retailers began to use disaggregate consumer data to drive traffic, brands were seen as coarse and expensive means for achieving traffic volume
Launched its consumer information based relationship in 2001 in UK
BUT
Its consumer data covered only a small slice of overall consumer data
SO…
Example
Launched its consumer information based relationship in 2001 in UK
BUT
Its consumer data covered only a small slice of overall consumer data
SO…
They merged their information with TESCO
Example
Now a days, entrenched brandmanagement organizations are proving tobe an impediment to the adoption ofconsumer-level disaggregation initiatives
Example
Information based marketing program is treated as an add-on to existing channels for reaching the consumer. The brand manager, whose brands are featured in disaggregate marketing campaigns, allocates budget to fund the program. This method defines marketing as another media choice, not a different way of doing business.
The focus of Marketing efforts remains the brands, not the Consumers
Brand Management System
- Were designed for an era of mass marketing
-Not Suited to make good use of the tidal wave of valuable consumer information that is available
- Like in the case of automobile industry, it has been difficult to track consumer segment information while pulling brand information from the management system has been a much easier game
To understand the nature of thechanges required, managers must
recognize the need for threeelements in any new structure…
1) Relationship building entity and mechanism
2) Targeted communications that can exert a tactical influence on consumer behaviour
3) Obtaining expertise in new-product and brand development so that the portfolio of product brands can be continually rejuvenated
The ability to communicate anidentical message to large numbers ofconsumers makes brands ideal andnatural ally of mass production
- Disaggregation is proving to be an efficient and profitable marketing approach
-The firms are quickly realizing that disaggregation is not just an add-on to their brand-focused organizations. It is a different way of doing business that challenges brands and brand-based organizational structures
- However, Brands are an excellent means of developing and communicating a differential value proposition in the market
- Aggregation OR Disaggregation
- Find your Brand purpose
- Brand Level OR Customer Level
- To build a strong relationship with the customers
Armed with a basket of such valuepropositions, a manufacturer’s umbrellabrand might even rightfully aspire to the
ultimate prize – a relationship with
the customer