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Strategic Brand

Management

Chapter 5- Designing Marketing


Programs to Build Brand Equity

Group 2

Presented By:
Barun Singh
Basnet
Khusboo Verma
Sudha Luitel

Pricing Strategy

Traditional mix
Revenue generating element

In this section:
Price perception that consumers might form
Pricing strategies firm might adopt for brand
equity

Consumer Price Perception

Categorization of price of brand by consumers


Price bands:
Range of acceptable price within price
tiers.
Value-based pricing strategies
Opportunity cost

Setting prices to build brand


equity

A method for setting current prices


= Value Pricing
A policy for choosing the depth and duration
of promotions and discounts.
= Everyday-low-pricing

Value Pricing Strategy

The key components:


Product design and delivery
Product costs
Product prices

Eg: Southwest Airlines, Walmart, Marlboro

Product design and delivery

Consumers pay premiums to value-added


product and services.
Strong brand differentiation have led to price
premiums.
Eg: P&Gs most expensive Gillette razor. i.e.
innovative

product

support.
Amazon.com

with

strong

marketing

Product Costs

Lower cost as much as possible.


Outsourcing,

Material

substitution,

Product

reformulation, Product changes


Considering

your

overhead,

customer really willing to pay?

look

if

your

Product Prices

Straightforward

approach

to

know

the

consumers perception is to ask them.


Price according to perceived value of the
product.
Eg:
H.J. Heinz (Cat food- four cans for a dollar)

Communicating Value

Consumers need to know and understand


brand value.
In some cases, values are clear and obvious.
For unclear cases,
Communicate in straightforward approach
Frame and convince customer (Eg: P&G)

Price Segmentation

Different price for different value perception


Yield Management
Eg: Starbucks, Apple, Airlines.

Everyday Low Pricing (EDLP)

Means of determining price discounts and


promotion over time.
Eg: P&G

Reasons for Price Stability

On supply-side:
Forward buying by retailers
Diverting the selling area

On demand side:
Diminished brand equity


Channel Strategy

Marketing Channels

Set of interdependent organizations involved


in the process of making product or service
available for use or consumption.
Channel

strategy

includes

design

and

management of intermediaries
Wholesaler, distributors, brokers and retailers.

Channel Design

Direct Channel
Indirect Channel

Winning strategies; Combination of physical


store, Internet, Phone and Catalogs
Eg: Nike

What are the key factors in


channel from consumer
viewpoint??

Information (learning about brand)


Entertainment

(means

by

which

channel

in

channel

permits purchase)
Experiences

(participation

activities)

Eg: Wrong Channel Strategy;

Indirect Channels

Retailers
Most visible and direct contact with customers.
Creates own brand equity
Establishes
association.

strong

awareness

on

brand

Push and Pull Strategies

Shopper marketing:
Collaboration

between

manufacturers

retailers for in-store marketing


Displays, Sampling promotion & so on.
Eg: VLASIC

and

Contd..

Push Strategy: Devoting channel members to


stock and sell products.
Pull Strategy: Devoting marketing efforts to
end consumers

Channel Support

Educate the distributors about product as to


create effective sales force among the retail
partners.
Offer dealer exclusive access to new products
or branded variants

Components of partnership
strategies

Retail
market

Segmentation
research

(SC

insights

Johnson
to

leveraged

develop

customized

unique

category

management solutions to its strategic retail customers.)

Brand variants : Different product mixes, delivery systems for


different retailers.

Cooperative Advertising

Advertising cost on percentage basis usually 50-50

Co-op ad continue to strike balance between the brand and store


at same time.

Direct Channels

1. Company-Owned stores(Eg: Apple, Goodyear, Hallmark)

Pop-up stores- temporary store that blends retail and


event marketing.

Advantage:

Disadvantage:

Showcase of brand Operating as retailer


Direct

customer

distributors.

response Potential

conflict

with

Direct Channels(Contd..)

2. Store-within-a-store
Store within major department store
Branded mini-stores exists
Dual benefits of retailers brand image and
having control of manufacture over design and
product presentation.

Direct Channels(Contd..)

3. Other means
Catalog stores
Electronic means
Phone
Mail

Online Strategies

Integrated channels allow consumers to shop


when and how they want.
Manufacturer

with

multiple

channels

are

benefitted.
They gain market power with suppliers.
They

have

established

distribution

and

fulfillment systems.
They can cross-sell between websites and

In Nutshell

Product is heart of brand equity.


To build brand equity, marketers must determine
price and adjust them over short and long run which
further reflects consumer perception of value.
Channel strategy includes designing and managing
various channels to build brand awareness and
improve brand image.


Thank You