Contents

Building Strong Brands........................................................................................................... 2

Key terms............................................................................................................................ 2
Possible projects................................................................................................................. 2
Different definitions of a brand........................................................................................... 2
How to raise brand awareness............................................................................................ 2
Discussion........................................................................................................................... 2
Depends on offered product or service............................................................................2
The companys origin...................................................................................................... 3
Companys priority.......................................................................................................... 3
Discussion: How can companies differentiate products......................................................3
Product Levels..................................................................................................................... 3
Five Product Levels............................................................................................................. 4
Product Mix Decisions............................................................................................................ 4
Product Mix is the set of all products a firm offers..............................................................4
P&G Product Mix................................................................................................................. 4
Example.............................................................................................................................. 5
New product development Strategy................................................................................... 5
New product development: Reasons for new product failure..............................................5
Chapter 15: Designing and Managing Marketing Channels & Value Networks.......................7
Designing Marketing Channels............................................................................................... 7
Push and Pull distribution strategies................................................................................... 7
How a Distributor increases Efficiency................................................................................7
Disadvantage...................................................................................................................... 7
Depends on......................................................................................................................... 7
Consumer Marketing Channels........................................................................................... 8
Industrial Marketing Channels............................................................................................. 8
Steps to design distribution strategy..................................................................................8
Managing Distribution Channels............................................................................................ 8
Recruiting distributors......................................................................................................... 9
Training / Motivating........................................................................................................... 9
Evaluating / Controlling....................................................................................................... 9
Evaluating........................................................................................................................ 9
Controlling....................................................................................................................... 9
Case studies: Pricing............................................................................................................ 10
Case 1............................................................................................................................... 10

Case 2............................................................................................................................... 10
Case 3............................................................................................................................... 10
New-Product Pricing Strategies......................................................................................... 10
Market-skimming........................................................................................................... 10
Market-penetration........................................................................................................ 10
Price..................................................................................................................................... 10
Definition.......................................................................................................................... 10
Discussion......................................................................................................................... 11
Internal conditions......................................................................................................... 11
External conditions........................................................................................................ 11
3C model for pricing......................................................................................................... 11
Product Mix Pricing Strategies.............................................................................................. 12
Term: BCG matrix.............................................................................................................. 13

Building Strong Brands

Key terms

Brand
Brand Equity
o 4 components: Br Awareness, Perceived Quality, Brand Association, Brand
Loyalty
Brand Identity
o Physical / Visual components (?)
o How the company wants customers to perceive it and its products.
http://www.investopedia.com/terms/b/brand-identity.asp
o
Brand Image
o How the customers perceive the brand.
Co-Branding
o

Possible projects

Measuring Brand Equity

Different definitions of a brand

Brand is a promise of quality & experience (greater than the product)

A concept that is in the customers mind (?)
A property (?)

Can be measured
How is brand awareness measured?
https://en.wikipedia.org/wiki/Jennifer_Aaker

How to raise brand awareness

Promotion
Advertisement
Billboard
Event sponsorship

Some small companies can choose not to build a brand(?)

Discussion
For a new company, new product, when is a good time to decide on a brand? What does
the timing depend on?
Brainstorm
Depends on offered product or service
Consumer product (food, etc)
High-tech product:
Niche product:
Service:
High-tech service:

Niche service:

The companys origin

From scratch, brand new
Already has an online presence
From a few people & seperate products, with some customer-based
Already has a base, previously sold un-branded products(?), to identify target
customers & position
Companys priority
Smaller company: Just have a placeholder name, e.g. an acronym (VP Bank, TH
milk) and assign a meaning to it later. Or change the logo / slogan altogether.
Name / logo / design inspiration
o Owners favored color (feng-shui stuff, blah blah blah)
Delay having a brand(which is costly) until the company has gained traction and
built a customer base.
Use one brand for all products, or sub-brands for each of the products.
o General brand: good brand recognition
o Sub-brand: if one product fails, the whole companys reputation doesnt take a
hit. Introduce new product that is different from the previous image of the
company (e.g. Lexus, not Toyota)

Discussion: How can companies differentiate products

Emphasise the benefit

o Design
o Functionality
o Image
o Functionalities
o
Brand name & image
Packaging
Pricing
After-sale service
Other P of services

Product Levels

Core product
o Core Benefits
Specific product
o Brand
o Packaging
o Design
o Features
o Quality
Augmented product
o Payment
o Installment
o After-sale Service
o Warranty

Tragic brand names

Nova car in Mexico

Five Product Levels

Kotler

Core benefit
Basic (generic) product
Expected product
Augmented product
Potential product (wut?)
o Future features(?), upgrades
o Future benefit (for next generation?)

http://www.provenmodels.com/16/five-product-levels/philip-kotler
http://www.marketingstudyguide.com/five-product-levels-in-marketing/
http://www.toolshero.com/marketing/five-product-levels-kotler/
http://www.cgma.org/Resources/Tools/Pages/Kotler's-Five-Product-Level-Model.aspx?
TestCookiesEnabled=redirect
http://www.afidated.com/2016/02/5-product-levels-with-examples.html

Product Mix Decisions

Product Mix is the set of all products a firm offers

Product Mix width: number of different product lines

Product Mix depth: number of variations
Product Mix length: total number of items (i.e. expand a hotel to provide more rooms
???)

P&G Product Mix

Detergents
Tide
Cheer
Bold
Dash

Bar Soap
Ivory
Camay
Coast
Oil of Olay

Diapers
Pampers (4 variation)
Luvs (3 variation)

...

Example
Vingroups Product policy on residential real estate/Vinhomes (e.g., Royal City, Times City,
Vinhomes riverside, etc)

Vincom (luxury retail)

Vinhomes (Real Estate)
Vinpearl (tourism, entertainment)
Vinmec (health care)
Vinschool (education)
Vinmart (consumer goods retail)
Adayroi (ecommerce)

FPT

Telecommunication service
Consumer Electronics Store
Education (University, Highschool)

New product development Strategy

New product development process

Idea generation is the systematic search for new-product ideas
Idea Screening: identify good ideas and drop poor ideas
Concept Development and Testing: product concept is a detailed version of the idea
stated in the meaningful consumer items.

New product development: Reasons for new product failure

Overestimation of market size

Poor design
Incorrect positioning

Wrong timing
Priced too high
Ineffective promotion
Management influence
High development cost
Competition

Think about your teams product policy

Chapter 15: Designing and Managing Marketing Channels &

Value Networks
Designing Marketing Channels
Push and Pull distribution strategies

Push strategy: resources to persuade intermediaries to carry, promote, sell product

o Commission
o Work closely with distributors, provide them with training & promotional
materials.
o
Pull strategy: advertise & promote - consumers - get intermediaries - order product
o Advertise & Promote
Employ a mix of both

How a Distributor increases Efficiency

Intermediary: Carry product from manufacturers to consumers. Have different levels
and names.

Reduces the number of contacts

Distributors are more professional at promoting
Dont have to spend as much on storage & inventory
Abstract benefit (?): Company image

Disadvantage

Dependence
Commission
Abstract problem (?): Company image

Depends on

Environment (PESTLE, etc)

Costs & Benefits
Types of product
o Direct channel: industrial equipment, specialized equipment
o Distributor: consumer products
Differences in location between manufacturer and consumer
Size & resources of company
o
o
Type of distributor
o Wholesalers
o Retailers
o Supermarkets
Companys objectives (periods of time) and strategy
o Big companies (who typically dont use direct channel), when launching new
products, might employ direct distribution: door-to-door selling, mobile stalls,
promotional stalls, etc to introduce new product and/or gather customer
opinion.

Consumer Marketing Channels

0-level
1-level
2-level
3-level

(Manufacturer
(Manufacturer
(Manufacturer
(Manufacturer

Consumer): Direct channel

Retailer Consumer)
Wholesaler Retailer Consumer)
Wholesaler Jobber Retailer Consumer)

Industrial Marketing Channels

0-level:
1-level:
2-level:
3-level:

Manufacturer Industrial Customer

M Industrial distributors IC
M Manufacturers representative ID IC
M Manufacturers sales branch MR ID IC

Supermarket & Hyper market

Steps to design distribution strategy

Analyze target customers: location, shopping pattern (traditional market, shopping

center, supermarket, hypermarket, etc), attitude, the benefit they look for, etc
Setting objectives of distribution channel (for the next period of time):
o Raise awareness
o Increase coverage
o Increase market share
o Build good image
o Raise demand (create scarcity)
Come up with alternatives of channels
o Do we choose 0-level? Sales volume, profit, etc
o 1-, 2- or 3-level?
Decide on intermediaries
o Locations: dont want to pick two distributors in the same area
o

Potential distribution channel conflicts / causes

Compete between different channels (direct and indirect) wasted resource (E.g.
When manufacturer sells product directy to customer customers trust
manufacturer more distributor lose customers)
Horizontal conflict: Intermediaries competing for lower-level intermediaries or
consumers (when in the same location)
Vertical conflict: commisions, policies. Manufacturer awards different rate of
commission fees to different intermediaries.
An intermediary can represent or distribute products for two different manufacturers
conflict of interest

The more levels and more members per level, the more complicated it gets.

Managing Distribution Channels

Recruiting distributors Training, motivating Evaluating, controlling Feedback
Recruiting etc

What are the criteria for recruiting?

What are the main methods for motivating?
What are the main methods for evaluating / controlling?

Recruiting distributors

Technical / marketing / promotional / selling experience

Reputation
Financial capacity
Facility, infrastructure, location (good coverage...)
High personnel competence: good sales skill, knowledge, experience, ... Good
service
Distributors customer base matches target customers
Personal relationships / referrals
BITIS, Trung Nguyen, etc have specific criteria for recruiting distributors

Training / Motivating

Train about: product, sales, service, etc

Provide support: information, personnel, financial, product display, etc
Emphasize mutual benefit
Incentive programs (commissions, rewards for good salespeople)
Open communication: Be clear of your expectation and listen to their feedback

Evaluating / Controlling
Evaluating
Sales: revenue, profit (from distributors reports)
Customer feedback: survey, social media
Inspection
Controlling
Inspection
o service quality: building quality, display, personnel competence etc
o inventory
Periodic sales reports

Case studies: Pricing

Case 1

Describe and analyze Pricelines NYOP system.

Who are the target customers of Priceline?
Discuss the pros and cons of the NYOP pricing system.

Case 2

Critically analyse the pricing decisions that Apple took for its iPhone. What led the
company to reduce the price so drastically?
Discuss how Apples pricing decisions regarding the iPhone was expected to impact
the early adopters of the phone.

Case 3

Critically analyze the issues regarding Fuzeons pricing. Is Roche justified in adopting
a high pricing strategy for Fuzeon?
What should Roche do to improve the sales of Fuzeon? Do you think the price cut
would help in increasing the sales of the brand?

New-Product Pricing Strategies

http://www.investopedia.com/terms/p/penetration-pricing.asp
Market-skimming
High initial prices to skim revenue layers form the market

Product quality & image must support the price

Buyers must want the product at the price
Costs of producing the product in small volume sould not outweigh the advantage
of higher prices
Competitors should not be able to enter the market easily

Market-penetration
Low initial price to penetrate the market quickly and deeply to attract a large number of
buyers quickly to gain market share
http://www.businessstudynotes.com/marketing-management/example-conditions-applypenetration-pricing/

Price sensitive market: soft drink, personal care products, (sometimes) high tech
products
Inverse relationship of production and distribution cost to sales growth: product must
cost less per unit to make and distribute more
Low prices must keep competition out of the market

Big companies might endure loss in a certain market for extended periods of time to gain
market share. (Profit comes from elsewhere, or the company )

Price
Definition

Amount of money charged for a product or service. It is the sum of all the values that
consumers give up in order to gain the benefits of having or using a product or
service.
Price is the only element in the marketing mix (Ps) that produces revenue; all other
elements represent costs.

Discussion
Factors to consider when setting prices
Internal conditions
Investment
o R&D cost
o Production cost: Suppliers
o Distribution cost: Inventory, transportation, promotion
Strategy & Objectives
o For market penetration
o For keeping out competitors
o For market skimming
o Expected profit margin (long term)
o Etc
Internal policy: top / bottom price.
External conditions
Policy: interest rate, tax, top or bottom price for certain products (electricity, tuition
fees)...
Customers perception of products quality, brand, image
Public opinion of companys ethics

Market share, distribution channels (supermarket, traditional market, shopping mall,

etc)
Demand & Supply
Competitors prices

3C model for pricing

Customers assessment of unique product features

Competitors prices and prices of substitutes
Costs

Which companies stress on one C much more (or much less) than others
Customer

Construction
Consulting:
Luxury ()
Cosmetics
Healthcare
Entertainment

Competitors

Product Mix Pricing Strategies

http://www.marketingteacher.com/pricing-strategies/

Product Line pricing

o Example: Gillette
Optional-product pricing
o Optional components
Captive-product pricing
o Compatibility (printer ink, razor blade, )
By-product pricing
o Pricing lowvalue by-products or services to get rid of them
Product bundle pricing
o Pricing bundles of products sold together. (Fruit baskets, Tour,... )

Case Study: Gillette

Market segmentation
Price \ Quality
Low

Low

High

High

Sensor: $?
(10%
markup)

Quality
product
Mach3: $9.95
(15% markup)

Profit: increase
Market share: increase (54% of Mach3 users is new customers)

Term: BCG matrix

https://en.wikipedia.org/wiki/Growth%E2%80%93share_matrix

Cannibalization Strategy
Creating new product in the same product line, if not careful when setting price

Unsuccessful: kill the sales of the old product.

Successful: attract new customers
Quality \
Price
Low

Low

Medium

High

Price-Adjustment Strategies
Page 403

Mediu
m

High

Discount and allowance pricing

o Discount
o Quantity discount
o Functional discount
o Seasonal discount
o Allowance
Differentiated
o Segmented pricing
Promotional pricing
o Loss-leader pricing
o Special event
o Special customer
o Psychological pricing
o
o ...
Geographic pricing
o
Dynamic pricing
o the practice of pricing items at a level determined by a particular customer's
perceived ability to pay.
o Segmented
o Peak User
o Service Time
o Time of Purchase
o Changing Conditions
International pricing

Price Changes
Buyer Reactions to Pricing Changes

Price
o
o
o
o
o

Increases
Indifferent ()
Higher perceived quality
Disappointed
Reduced demand, less consumption, switch to another product / substitute

Price
o
o
o
o
o

cuts
Lower quality / near expiration date
New product is coming out
Company going out of business
Promotion sale

Blah blah blah, before adjusting prices, check stuff etc etc

Chapter 17: Designing & managing Intergrated Marketing

Communication (IMC)
IMC

All communication tools should deliver a consistent message. For example, a luxury
product should not be on sale.

Marketing Communications Mix

Advertising
Sales promotion
Events and experiences
Public relations and publicity
Direct marketing
Interactive marketing
Word-of-mouth marketing
Personal selling

Elements in the communication process

Steps in developing effective Communications

Objectives
Category need
Brand awareness
Brand attitude
Brand purchase intention

Exercise: Dog dilemma

Brand
awareness
(%)
Trial (%)

Brand
preference
(%)

HH
80 (good)

TT
30 (bad)

75 (good 93% of people

who are aware of the
brand try it)
40 (only over 50%
prefer it)

25 (good)

20 (good)

Repeat
purchase
(%)

35 (good - 87.5% of
purchasing customer
comes again)
New product line,
focused on taste (?)
- Pricing
- Target audience
- So that the new product
does not take away from
the old product

20 (excellent)

Target audience: ?
Why lower awareness?
- Wrong channel
(mismatch between
target customer and
target audience)
- Not enough channels