what are brands good for - niraj dawar

What are Brands Good For ?

MIT Sloan Management Review

Harvard Business School Case

What is a

Brand ? Harvard Business School Case

A brand is a product, service, or concept that is publicly distinguished from other products, services, or concepts so that it can be easily communicated and usually marketed.


Brands

Indispensable part of modern business.

Aggregating consumers -- reaching large number of people with a promise to deliver a clearly stated benefit that sets it apart from competitors.


Key Players

Consumers Brand Managers/Firms


How Does

Brands Help

People?


Clearly state benefits of using the product,

Reduce people’s perceived risk,

Makes it easier for the people to make a

purchase decision.


Role of

Brands in

Organizations


Role of Brands (1/4)

Advertising and promotions of brands

drive traffic and sales volume.


Prime platform for building

relationships with the consumers.




Central to firm’s responses to short-term competitive moves.


Source of MARKET POWER and

HIGHER RETURNS.



Objectives

Of This Case


OBJECTIVES

To learn about role of the brands in the consumer disaggregation marketing.


Situation

Analysis Harvard Business School Case

Brands lead to aggregation of consumers by influencing the mass

With the rise of Information revolution 2 way communication has been better than 1 way communication

Consumer disaggregation is more efficient and profitable than traditional source of Brand Power, Aggregation

Then, What are Brands Good For? Firms have to highlight the role of brand in disaggregation Marketing.

Retailers argue that in the eyes of consumer, they have greater credibility in assembling an assortment of products and brands that make sense for the consumer and is not perceived to be driven by an interest in selling one brand over another


Aggregation or Disaggregation

Marketing ? Harvard Business School Case

The Information Revolution is making consumer disaggregation vastly more efficient and profitable than aggregation (traditional source of brand power)


AGGREGATION

Involves treating all consumers as if

they are the same.


Create a single type of product.

Use mass-market advertising to

deliver a single sales message to the

entire market.

DISAGGREGATION

Segmenting the market into distinct groups.,

Designing different versions of the product/service, customizing each to suit the needs of a particular segment.,

The company will be able to market each product to a group that is likely to buy it. Harvard Business School Case

Question to be addressed..

What are Brands

good for in an

era of

disaggregation? Harvard Business School Case

The answer can be found by examining three core areas of Brand Management:

Consumer Relationship

Channel Relationship

Organization of Brand management

1. Consumer Relationship (1/3)

Disaggregation offers companies the possibility of establishing relationships in which each interaction b/w consumer and firm builds on history of past interactions.

Firm responds to the needs of the consumers

from one interaction to the next.

Consumer pulls information from the company

according to their needs.


1. CONSUMER RELATIONSHIP (2/3)

Companies that employ disaggregate marketing.

Quick to respond to consumer needs.

Better able to tailor their offerings.

Quick to respond to consumer needs.


1. CONSUMER RELATIONSHIP (3/3)

Communication costs are

dramatically reduced

More precise and profitable pricing.

Consumer satisfaction


Example

Kraft Foods Inc.


K af Food …

Distributing free magazines quarterly to the registered consumers with personalized to the individual consumer ( name of the reader on the inside cover page)

Consumers appreciate the personalized information


Impact


Impact of the program(1/2)

The locus of the consumer relationship shifts away from the

product brands toward a trusted and

credible umbrella brand


Impact of the program (2/2)

Tactical activities such as product-trial coupons and selective

promotions are implemented with the

targeted consumers rather than

at the brand level.


2. The Channel Relationship (1/3)

Retailers use well known brands to attract consumers to their stores.

In eyes of consumers, the retailer has greater credibility in assembling an assortment of products that makes sense for the consumer. Not perceived to be driven by an interest in selling one brand over another.


Risk for manufacturers


Consumer’s relationship will be more with the

retailers’ umbrella brand instead of the branded

goods manufacturers.


How to Conquer?


2. The Channel Relationship (2/3)

Disaggregation provides manufacturers

with a new medium to influence consumer

decisions that is independent of the retailer.


Outcome


2. THE CHANNEL RELATIONSHIP (3/3)

Manufacturers realize that their brand’s chances of

survival will be better if they become an essential

element of the retailer’s value proposition to consumer segments.


EXAMPLE

P&G made an alliance with Tesco Plc(grocery chain in U.K.) ,

Launched Physique hair-care brand in U.K. through the Tesco channels, using its publications and consumer information.


3. The Brand Management

Organization

The old era model of Brand management allowed budgets and profits to be measured and marketing initiatives to be developed at the brand level without interference from other brands.

But…

Brand management systems have much to commend,

They are designed for an era of mass marketing and are not well suited to make good use of valuable information that is now available.


Organization


Problems…

Difficulty in pulling together information to determine

whether a specific customer is profitable, or whether

the customer and his family is loyal to the brand.

Whether the general segment to which that customer belongs

is financially attractive.


Solution

Consumer-centric

organization


Three elements to make consumer-centric organization


Organization


1. Relationship based on trust and responsiveness.


Organization


They should never be unsolicited

2. Targeted communications which

are always based on an individual’s permission.

3. THE BRAND MANAGEMENT

ORGANIZATION


3. THE BRAND MANAGEMENT

ORGANIZATION

3. Obtaining expertise in new-product and brand development so that the portfolio of product brands can be continually rejuvenated.


Take away from the case


The Value Proposition of Brands

Whereas assembly lines shrank the cost of building products, brands reduced the cost of building markets.

Brands have unique ability to aggregate consumers into viable markets economically and efficiently.


The Value Proposition of Brands

Brands are an excellent means of developing and communicating a differentiated value proposition in the market.

Brands with a basket of such value propositions establishes a deep relationship with the customer.


Created By: Dipanshu Sehjal, IIIT Allahabad

During an Internship under the guidance of

Prof. Sameer Mathur

IIM Lucknow

www.IIMInternship.com

what are brands good for - niraj dawar

Marketing

modern business

role of brands

brands good

promotions of brands

brands indispensable

aggregation of consumers

era of disaggregation

source of market power