Class Lecture of Prof. Dr.

Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Course: Strategic Class 1:

Brand Management
Date: 03.09.12

The term Brand originated from Greek word Brandr which means to burn basically used to identify the cattle from one seller to another. According to American Marketing Association (AMA) A brand is a name, logo, design, symbol or any other element which will differentiate one product to another A brand is a trust and commitment. Why is Brand important? For 6 reasons 1. A branded product or service will reduce functional risk of the product 2. A brand reduces financial risk of a product that is consumption or use of branded product is the perfect worth value of money 3. Use of branded product increases psychological satisfaction of the customer 4. Consumption or use of branded product increases social status of a person 5. Branded products reduces time cost because it requires less time to purchase as there is no bargaining. 6. Physical risk is also reduced by the use of branded products.

Class 2

Date: 10.09.12

A product is a tangible or intangible element which is offered to the customer to maximize their satisfaction. Or A product is a package of benefits that satisfy desire of the customer. Physical products have 4 characteristics. It product can be touched. It product can be stored. It product can be seen. It product can be smelt.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Educational institutes sells idea. (Research & teaching) Wants are the higher order desire. Needs are felt deprivation Wants are unlimited. Need Felt deprivation

Want

Fulfilling higher order needs supported by social norms

Product/Service

A Package of benefits

Demand is a desire which must be supported by 3 things 1. Ability to pay 2. Willingness to pay 3. Legal support Violation of any of the three conditions will not be considered as demand. Thus demand means effective demand. Service is continuously variable. Level of product: There are 5 level of product. 1. Core productThe fundamental ingredients which will fulfill customers fundamental ingredients that will fulfill wants. Example is car. 2. Generic productAdditional features that will satisfy customers demand. Example AC in car. 3. Expected productAdditional attributes (benefits) that expect customer while purchasing the product. Example is GPS facility in the car. 4. Augmented productExtra benefits that will enrich quality of products and that will differentiate from one product to another. 5. Future productThe feature that might ultimately undergo in future. Samsung expend 3 b $ for R&D per year. Branding begins from the generic level where additional characteristics are added to the core product in order to differentiate the products one company to another company. Can anything be branded? Yes, any product can be branded by adding additional benefit but commodities cannot be branded because commodities contain similar characteristics. What are the key to enduring brand? Why some companies are successful in branding & how do you brand a product. 1. Vision of the mass market Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

2. 3. 4. 5.

Managerial persistence Financial commitment Relentless innovation Asset leverage

1. Vision of the marketTo sustain in the long run, marketers will continuously gather information about the changing taste and preferences towards a particular product and thereby improve and modify the product which is known as vision of the mass market. 2. Managerial persistenceFor branding management must persist at least for 10 years according to the success stories of P&G. Management persistence also means continuous innovation in the production method to simplify the product and also to apply the TQM (Total Quality Management) applying six sigma. Six sigma means approx 3.43 error per 1 million production in Japan. 3. Financial commitmentFor branding companies must lavishly spend or invest money. This investment may be in product development, promotional expenditure, employee benefits and financial incentives to the channel members. 4. Relentless innovationFor branding companies need continuous innovation about new products that will force the customer to buy it. 5. Asset leverageIt means marketers will promote a maximum of 3 products as a brand and remaining products will be sold out under the popular brand of 3 products.

Class 3

Date: 17.09.12

Brand Challenges and Opportunity

1. Savvy Customers 2. Maturing Markets 3. More Sophisticated and increasing competition 4. Difficulty in product/ service differentiation 5. Growth of private level brands 6. Fragmenting media Coverage 7. Emerging new communication tools 8. Increasing promotional expenditure 9. Increasing cost of products 10. Increasing trade power 11. Brand proliferations 12. Short term performance orientation 13. Luck

1. Savvy (Experienced) Customers: Customers of today are not behaving with the customer of yesterday. Over the passage of time customers are gathering a variety of experiences regarding the product or services for which it has become tougher for the marketer to convince them and thats why branding become tough.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

2. Maturing Markets: According to PLC, When sales tend to reach mature stage, branding becomes difficult, because customers are well acquainted with the products, its benefit and attributes and the value it creates. 3. More Sophisticated and increasing competition: Sophisticated and increasing competition for branding is not a problem for the country like Bangladesh because virtually there is no competition in developing countries. The problem is acute in developed countries where for example on Bi-Cycle manufacturing company manufactured 11 thousand types of bicycle (Herculis). 4. Difficulty in product/ service differentiation: Many companies are producing though similar products but it has become impossible to distinguish one to another. 5. Growth of private level brands: Private level brand means which are locally produced, do not compete with national brands but have different history and heritage. This private level branding has been increasing and as a result national brands are facing though challenges 6. Fragmenting media Coverage: It means the growth of a variety of print and electronic media. As a result marketers cannot precisely give the right information to the customers about his product and the branding faces challenge. (eg Bogras doi). 7. Emerging new communication tools: The growth of new technology which is popularly known as e-marketing has made it more difficult to the marketers about the promotion of their products. 8. Increasing promotional expenditure: Promotional expenditure as part of total sales volume has been increasing at a geometric progression which ultimately impact on the production cost and hence on price. Thus for medium sized companies it require huge money to invest. Unfortunately many companies cannot afford it, thus customers are aware of the products. 9. Increasing cost of products: Due to heavy promotional expenditures and other investment for branding increasing the per unit cost of product resulting to a higher price leads to declining demand. Thus branding faces challenges.

10. Increasing trade power: To capture the market many companies formally and informally are forming alliances in order to making new entrants/ new competitors to stay into the market and thereby making the business more difficult. The formal alliance is known as Oligopoly and informal alliance is known as Cartel or Syndicate.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

11. Brand proliferations: It means within the same category of the product there are wide varieties available and therefore becomes extremely difficult to brand any product of similar nature. 12. Short term performance orientation: Unfortunately, marketers want to maximize their return with in shortest possible time even over night, if possible. For branding it requires at least 10 years to wait. 13. Luck: For branding when every attempt was unsuccessful marketers relies on luck factor. Class 4 Strategic Brand Management Process 1. Identifying and Establishing brand positioning and value a. Mental Map b. Competitive Frame of References c. Identify Points Of Parity (POP) and Points Of Differences (POD) d. Core Brand Value e. Brand Mantra 2. Developing Marketing program for brand equity a. Matching and mixing brand elements b. Integrating brand marketing activities c. Leverage for secondary brand association 3. Measuring and interpreting brand equity a. Brand Value Chain b. Brand Audits c. Brand Tracking d. Brand Equity Measurement System 4. Growing and sustaining equity a. Brand Product Matrix b. Brand Portfolios and Hierarchies c. Brand Expansion Strategies d. Brand reinforcement and revitalization Details: 1. Identifying and Establishing brand positioning and value Brand Positioning means occupying or capturing some portion customer mind about the product being marketed. Value means the attribute and benefits of the product that must be unique compare to other competitive products. Nadeem Nafis-41119044 Date: 24.09.12

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

a. Mental Map: It means identifying how does the customer mind set preoccupied with the existing available products that means for branding marketers must identify who are the current market, why are they purchase and what still remain unfulfilled. b. Identifying and Establishing brand positioning and value It means identify what the existing competitors are offering to the customer with respect to product, price, place and promotion and also to identify through bench marking how to cop with existing competitors. Bench marking means Itly and personally visiting the factory and office to see how the leading brands are making their products. c. Indentify Points Of Parity (POP) and Points Of Differences (POD) Points Of Parity (POP) means identify the similarities with in the existing competitors. Points Of Differences (POD) means dragging out the dissimilarities of products . By the analyzing the POP and POD marketers with innovate something more unique than the POD, which is known as the differentiate effect of the brand. Grameen and Bangla Link POP & POD Analysis POP F&F SMS MMS Internet POD Network Coverage Advertise pattern Call rate

d. Core Brand Value : It means for branding marketer must say/tell to the target customer what additional attributes and benefits are added to the product. That will be strong, unique and must be favored by everybody eg:KFC e. Brand Mantra: It means expression of core brand values of the product with in 3 to 5 words. It also called brand slogan. eg: The brand mantra of 7up is 7up uncola The brand mantra of Grameen is Stay close The brand mantra of Nokia is Connecting people

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Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Basics: 1. Strategy: It is a long term game plan to achieve company objective. When something not achieve normally then taken strategy. 2. Tactic: It is a Short term game plan (maximum 1 year) to achieve company objective. 3. Vision: Identifying what business should be in future (Future issue) 4. Mission: What is our current business and how to achieve it. (Current issue) 5. Objective: Numerical or quantifiable goal.eg The company will be profit this year 1Cr taka. 6. Purpose: Non quantifiable goal eg The company will be profit this year 7. Goal: Objective + Purpose 8. Short term: Among the 4 factors ( Labor, Land, Capital and Entrepreneur), when atleast 1 factor of production will remain unchanged within given time to achieve the goal called short term. 9. Long Term: When all 4 factors of production are changeable then that time period will be called long time. If it is even single day. There is no short time, everything is long time in business according to economics.

Class 5

Date: 01.10.12

CUSTOMER BASED BRAND EQUITY (CBBE) Equity is financial value of an asset. Equity can be tangible or intangible. Tangible part of the equity is product itself and intangible part of the Equity is reputation or goodwill of the product. There are three types of Equity 1. Brand Equity: It is the objective assessment of the customer about the product. Three drivers of brand equity are i. Quality ii. Price iii. Convenience (availability/ distribution). 2. Customer Equity: It is the subjective assessment of the customer about the product. The drivers of subjective assessment are i. Customer attitude ii. Awareness iii. Perceptions 3. Relationship Equity: It is the customers evaluation beyond the objective and subjective assessment about a product. The indication of relationship equity are i. loyalty ii. community program and iii. Product or brand Ambassador

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Customer Based Brand Equity (CBBE) : It shows the process by which a product transform its initial stage to the ultimate stage of branding. CBBE PYRAMID
What about you & me (Relationship)

Resonance Judgment (Superiority, Quality, Credivility) Performance (Feature, reliability, service ability, style, design and price.) Feeling (Fun, Excitement, Social approval, security) Imagery What about You? (Response) What are You? (Meaning)

Salience

Who are You? (Response)

It consists of 4 stages: 1. Salience: This is the introductory stage of a product. In this stage marketer will say to the customer about the category of the product and what function it will perform. Marketer will also tell to the customers the comparative benefits of the product to convenience the customer. This stage initially can be identify by a question, who are you? 2. After the aware about the product, customer will want to know what are the attributes and benefits of the product. In that stage, customer will specifically want to know product performance and the imagery. The indicators of product performances are feature, reliability, service ability, style, design and price. Imagery includes users profile, use, situation, personality, value history and heritage. 3. In the 3rd stage customer will make an attempt to purchase the product. Whether a customer will buy the product or not depends customers individual judgment & feelings towards the product. The 3 criteria of judgment are quality, credibility and superiority. The indicators of feelings are fun, excitement, warmth, social approval and security. 4. The final stage, customers will develop a long term relationship with the product, if they consider that the performance imagery, judgment and feeling are up to their level of satisfaction. In this stage relationship equity means established and this stage may called resonance. Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Class 6

Date: 22.10.12

Designing marketing program to build brand Four major drivers of this new economy are The new marketing perspective, according to Philip kotler are 1. Digitization & connectivity (through internet, intranet, and mobile devices) 2. Disintermediation and reintermediation (through new sorts of middle men) 3. Customization and customerization (through tailor made products and one-to-one marketing) 4. Industry convergence (through the blurring of industry boundaries- joint venture, merger, strategic alliance) 5. New consumers and company capabilities. The traits of new customers are: a) a substantial increase in consumer power b) A greater variety of available goods and services c) A greater amount of information about practically everything d) Easily interact with marketers in placing and receiving orders e) An ability to meet with other consumers and compare notes on products Under this situation to build brand marketer should focus on three new concepts of marketing 1. Radical marketing 2. Permission marketing 3. Experiential marketing Radical marketing: It includes 1. The CEO must own the marketing function. 2. Marketing department small, stay small & flat. 3. CEO must get out from the head office and face customers who meet. 4. Utilize direct consumer research and testing. 5. Employed those who love the company. 6. Respect the customer. 7. Create a community of consumers. 8. Give one to one targeted communication. 9. Apply unconventional wisdom to attract customer. 10. Quality must not be sacrificed at any cost. (use non conventional tools for marketing) Permission marketing (One to one marketing, Relationship marketing): It means developing a strong relationship with customers through various techniques and the relationship must have to be maintained for long term. Because customer retention has many benefits such as 1. Acquiring new customers can cost 5 times more than the cost involve in satisfying and retaining current customer. 2. In an average, company losses 10% of its customer each year. 3. A 5% reduction in customer can increase profit by 25-85% depending on the industry. 4. The customer profit rate trends to increase over the life of retained customer. Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

For relationship marketing, the company should focus more on quality and quality 1. Must be perceived by customers 2. Must be reflected in every company activity 3. Quality requires 4. Quality requires five quality partners. 5. Quality can always be improved. 6. Quality improvement sometimes requires quantam jam. 7. Quality does not always cost more. 8. Quality is necessary but may not be sufficient. 9. A quality drive cannot say a poor product.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Class 6

Date: 12.11.12

Brand equity measurement/Brand Value Chain Process

Brand value chain process consists of 4 stages 1. Marketing program investment 2. Customer Mindset 3. Market performance 4. Share holders value
Marketing Program Investment Customer Mindset Market Performance Shareholder Value

Value Stages

Product Communication Trade Employee

Awareness Associations Attitudes Attachment Activity

Price premium Price elasticities Market share Expansion success Cost structure Profitability

Stock Prices P/E ratio Market capitalization

Multiplier

Program Quality Program

Quality
Clarity Relevance Distinctiveness Consistency

Market Place Conditions

Investor Sentiment

Competitive reactions Channel support Customer size & profile

Market dynamics Growth potential Risk Profile Brand contribution

Stage 1: Marketing program investment In the beginning stage of introducing the product, marketers will invest especially the finance in 4 areas namely a) Product investment (Quality, price and location) b) Communication investment c) Trade investment d) Investment on employees Product investment means investment in product innovation, improvement of the existing product, modification of the product. The innovation improvement & modification need spending money on R & D and also in investment on technology. So that quality is ensured & uniqueness is achieved. Communication investment means investment in marketing communications which includes advertising, publicity, sales promotion, public relation & direct marketing through e-commerce or internet. All these require spending a large amount of money. Communication investment is needed to inform the customer, intrigue the customer & to influence the customer about the product. Among the various forms of communication, nowadays personal selling & public relation are the most effective tools. Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Trade investment means the various forms of financial & nonfinancial incentives given to the members in the supply chain process. Thus for promoting the product as brand, marketer must develop both forward & backward linkage. Investment on employees is the form of financial investment such as higher salary, commission, bonus etc. & non financial incentives such as various fringes benefits holiday & vacation, location, job security, compensation package etc. All these above need money. Stage 2: Customer Mindset If the program is effective it will immediately affect the customer mindset. Generally customer mindset is consisted with a lot of elements such as a) Values e) Conventions b) Norms f) Religion c) Tradition g) Culture d) Beliefs h) Customs etc. But from marketing point of view, customer mindset is evaluated by 5as namely 1. Awareness of the product (The extent and ease with which customers recall and recognize the brand and can identify the products) 2. Association with the product (The strength, favorability, and uniqueness of perceived attributes and benefits for the brand) 3. Attitude towards the product (Overall evaluations of the brand in terms of its quality and the satisfaction it generates) 4. Attachment with the product (How much times purchase the product) 5. Activities for the promotion of the product (Brand ambassador) If the 5s are positive, then one can say the marketing program investment is successful. Stage 3: Market performance If the customer mindset is positive towards the product then it will reflect in to the market performance. By market performance we can understand market share of the product will increase, company can expand the business, the cost structure of the company will decline. Customer will be less sensitive on price change which is called price elasticity & finally the profitability of the company will increase. Stage 4: Share holders value The positive attitude of the market performance will also reflect in share holders values. This means the share price of the company will rise, price earning ratio will decrease, the net asset value of the company will increase & company will offer an attractive reward to its customer either by cash dividend or by stock dividend.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Class 7

Date: 26.11.12

Pricing Strategy for Management

Eight Steps to better pricing 1. Assess what value your customer place on a product or services rather than based in pricing decision on product cost. Value based pricing means setting the price according to the opinion of the customers regarding the product attribute and benefits. Customer based value pricing will be a subjective judgment about the product price which may not reflect true attributes and benefit of the product. 2. Look for the variation in the way customer value the product. Companies can customize process to take advantage of this difference value. This means companies should set price on basis of region or location, which means for a single product price should be different for different customer. This difference will be taken on customer income level, customer attitude and product quality variation. 3. Assess Customer price sensitivity that is determining price elasticity of demand in compared with competitive situation. Price elasticity of demand helps markets to identify and determine three things i. Nature of the product i.e. luxury or necessity goods ii. to what extent price should increase or reduce iii. To determine the level of profit. 4. Identify an optimal pricing structure. Optimum pricing decision requires analysis of cost, demand estimation, marginal analysis, bundle of benefits offers of customer and competitors cost analysis. 5. Consider competitors reaction specially that they offer non price benefits, discount and credit facilities. 6. Monitor prices realized at the transaction level such as customer returns, damage claims, discount and rebate. 7. Asses customer emotional response to a price change .This is very much related to price sensitivity 8. Analyze whether the return are worth the cost to serve. Companies should aim to get customers to spend in accordance with the cost of serving them.

Nadeem Nafis-41119044

Class Lecture of Prof. Dr. Haripada Bhattacharjee Brand Management, Department of Marketing Faculty of Business Studies UNIVERSITY OF DHAKA

Eight Steps to better pricing 1. Assess what value your customers place on a product or service. Rather than basing pricing decisions on product cost, companies should determine the products value to the customer. 2. Look for variation in the way customers value the product. Customers often vary in how and why they use the product, leading different customers to value the product differently. Companies can customize prices to take advantage of these different values. 3. Assess customers price sensitivity. Companies should determine the price elasticity (price change in quantity sold given a 1 percent change in price) for its products in three areas: customer economics, customer search and usage, and the competitive situation. 4. Identify an optimal pricing structure. Rather than a fixed price, companies can decide to offer discounts based on quantity purchased or use bundle pricing to sell a combination of products. The different pricing structures can be analyzed to determine the optimal one. 5. Consider competitors reactions. In order to avoid costly price wars, companies must consider the long-term effects of price decisions in terms of the competition. 6. Monitor prices realized at the transaction level. Though a product may have a single list price, it may have many possible final prices due to discounts and rebates. Additionally, the real net revenue from a product is affected by factors such as customer returns and damage claims. The real price of a product must account for these elements. 7. Assess customers emotional response. A customers emotional response to a price can have long-term effects that outweigh the short-term economic impact of a sale. 8. Analyze whether the returns are worth the cost to serve. High cost-to-serve customers do not necessarily pay high prices, just as customers who spend little do not always receive low-cost service. Where possible, companies should aim to get customers to spend in accordance with the cost of serving them.

Nadeem Nafis-41119044