MARKETING AND SALES Masters Relationship Marketing New customers

MARKETING AND SALES Masters

Relationship Marketing New customers Vs. Old customers Selling customers today creating customers for tomorrow. RM= Customers Loyalty Continuous attention 2 -2

Whole Brain 4 Thinking Structures D © Herrmann International Group™ 2000 -2003 A CEREBRAL Whole Brain Model LEFT B RIGHT LIMBIC C 3

Success stories prices promotions © 1987 -2001 The Ned Herrmann Group 4

What if it doesn’t work? © 1987 -2001 The Ned Herrmann Group 5

You are not a number! © 1987 -2001 The Ned Herrmann Group 6

Visualisation © 1987 -2001 The Ned Herrmann Group 7

Relationship Marketing and the Sales Force ù Four basic questions used as guidelines in defining the role of the sales force: 1. 2. 3. 4. How much selling effort is necessary to gain and hold customers? Is the sales force the best marketing tool? What type of sales activity will be necessary? Can the firm gain strength relative to its competition with its sales force? 2 -8

Brand Value Three elements of Brand Value Functional Values Expressive Values Central Values Interbrand; The World’s Greatest Brands.

Brand Value Corresponding to Brand Hierarchy Pyramid Central Expressive Functional

Brand Value Functional Values: Govern product performance Coke refreshes its drinker Volvo gives its driver a safe ride IBM PC provides quick computing Don’t differentiate products Pepsi refreshes Mercedes is as safe as Volvo Apple is as quick as IBM Brand Owner’s “bright ideas” can be instantly copied in every continent Interbrand; The World’s Greatest Brands.

Brand Value Expressive Values: Say less about the product & more about the consumer Reflect and enhance the consumer’s sense of him/herself Provide a key source of brand differentiation Marlboro’s - masculine values Armani’s - status and fashionable values Apple - creative and human values Interbrand; The World’s Greatest Brands.

Brand Value Central Values: Most Enduring Right to the Core of the Consumer’s Belief System At their purest = embodied in religious, national or political persuasions Comparable power = embody mass movements or cultural trends 1960’s Coke “I Like to teach the world to sing” Today= Nike “Just Do It”, Interbrand; The World’s Greatest Brands.

Brand Value Corresponding to Brand Hierarchy Pyramid Central Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers Expressive Functional Easy to deliver and explain to consumers but also easy to imitate Interbrand; The World’s Greatest Brands.

Brand Value Corresponding to Brand Hierarchy Pyramid Central Beliefs & Core Values Expressive Benefits Functional Features & Attributes Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers Easy to deliver and explain to consumers but also easy to imitate Hierarchy : Timothy D. Ennis, Ennis Associates, Inc

Brand Value: Brand Hierarchy Pyramid The emotional beliefs and values that consumers feel are being addressed by our brand (CENTRAL) The functional and emotional benefits that our product/services provides to the consumer (EXPRESSIVE) Product/Service features and/or attributes that must be addressed (FUNCTIONAL) Beliefs & Core Values Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers Benefits Features & Attributes Easy to deliver and explain to consumers but also easy to imitate

Mc Cormick

Brand Value: Brand Hierarchy Pyramid Mc Cormick: The Taste You Trust CENTRAL VALUE Beliefs and Core Values EXPRESSIVE Benefits FUNCTIONAL Features & Attributes I take pleasure in how the family enjoys the meals I prepare Brand I Trust / Taste You Trust Part of making food my way Makes a meal/dish an eating pleasure Makes prepared meals taste better Brings out the best in foods Let me adjust to make it my own * Can be used with any dish * Adds flavor, Spicy * For everyday use * Has a lot of products I use * Easy to find when shopping * Largest variety of spices, extracts, dry seasonings, and mixes

Brand Hierarchy Pyramid vs Product Level Potential Product Augmented Product Beliefs & Core Values Very meaningful in differentiating our Brand but very difficult to deliver consistently to our consumers Expected Product Benefits Generic Product Features & Attributes CORE BENEFIT Easy to deliver and explain to consumers but also easy to imitate

Brand Equity A set of stored values that consumers associated with a Product/Service. These associations add value beyond the basic product functions due to past investments in marketing the Brand. Timothy D. Ennis, Ennis Associates, Inc

Brand Equity Brand Ingredients: Brand Name & heritage Packaging (structure & graphics) & signage Brand symbols, properties and logos Perceived quality, reliability & convenience Defined level of satisfaction Meaningful price/value relationship Purchase & usage experiences Consumer perceptions, attitude & behaviors Emotional associations with the product/services Timothy D. Ennis, Ennis Associates, Inc

Brand Equity Physical Product Attributes Quality Uses Kevin Clancy, Copernicus modified by Soni Simpson

Brand Equity Physical Product Attributes Quality Uses Kevin Clancy, Copernicus modified by Soni Simpson

Brand Equity BRAND GESTALT(structure) Brand Personality Visual Appearance Country of Origin User Imagery Physical Product Attributes Quality Uses Tangible Benefits Logo Brand Customer Relationshi p Emotional Benefits Kevin Clancy, Copernicus modified by Soni Simpson

Indicators of an underemphasis on Brand Building Can’t identify brand associations Brand awareness is lacking No valid measure of customer satisfaction No person in the firm who’s job is to take care of brand equity Evaluation of the impact of marketing on Brands Long term strategy Managers are short term thinkers (sales promotions)

Categories of Assets Brand name awareness Brand loyalty Perceived Quality Brand Associations Other Proprietary Brand Assets (e. g. , channel relationships, patents, …)

Brand Equity Increases Value Brand Loyalty Brand Awareness Brand Equity Value to Customer Perceived Quality Value to Firm Brand Associations Other Brand Assets

Brand Name Awareness Anchor to which other associations can be attached Familiarity-liking (I trust what I know) Signal of substance/commitment Brands to be considered (what’s your rank? )

Brand Loyalty Reduced marketing costs (repeat purchase) Trade leverage (expect the brand to be available) Attracting new customers (expensive) Create awareness Reassurance Time to respond to competitive threats

Perceived Quality Reason-to-buy Differentiate/Position Price (can support a premium) Basis for brand extension

Brand Associations Fun, entertaining, VIP…. Help process/retrieve information Reason-to-buy Create positive attitude/feelings Extensions

Brand Equity and Brand Value Brand Equity provides value to customers: Interpretation/processing of information Confidence in the purchase decision Use satisfaction

Brand Equity and Brand Value Brand Equity provides value to firm: Efficiency and effectiveness of marketing programs Brand loyalty Prices/margins Brand extensions Trade leverage (power over distribution channel) Competitive advantage

Brand Value Breakdown $US Billions J&J Unileve r

Discussion How has Ivory built each of the dimensions/assets of brand equity? How does Ivory create value?

Brand Equity The Ivory story It Floats, is pure, and mild Swan from Lever Brothers Value adding Long term view of brands 20% owned by employees

Brand Building Inhibitors Pressure to compete on price Proliferation of competitors Fragmenting markets and media Complex brand strategies and relationships Bias toward changing strategies Bias against innovation Pressure to invest elsewhere Short-term pressures

Revitalizing the Brand

Marketing should focus on market creation, not on market sharing

Revitalizing the brand Increase usage Finding new uses Entering new markets Repositioning the brand Augmenting the product

1. Increasing Usage Questions to ask? Less threatening to competitors Two ways: Frequency of use Reminder communication, make the use easier, provide incentives, use on different occasions, use at different locations. Quantity used Large containers, positive associations: can’t just eat one.

The Frequency of use Positioning: Milk, more than two cups a day Brush after every meal Phoning a relative once a week make the use easier: Packages Why they don’t use it more often? use at different occasions or locations Ask when and where? Can new times or places be introduced. Juices and breakfast. Wet tunes.

The quantity used Increase coverage – insurance business Tie and accessories when you buy a shirt low calorie salad dressing.

2. Finding new uses Baking soda Knnor Lipton soup R&D

3. Entering new market Sometimes need product modification Women/ kids/ seniors J&J baby shampoo Segmentation Growth segments within declining industry: light beer/nonalcoholic Segments not served well: women

4. Repositioning Change associations Tastes and fashion change Need for new associations Campbell Soup: Lunch supplement– ‘Mm good’ to ‘soup is good food’. Kids eating lunch at home is history Add value by differentiating The Perdue chickens story Tender chicken having a soft life in $60, 000 homes, getting eight hours sleep, avoiding junk food, and drinking pure well water.

Augmenting the product/service Differentiating element is fading away. The choice is based on price. Improving the package: new look, screw cap juice. What are the problems that are really irritating to the customer? Is there any way that added services can deal with them? In what way the customer is dissatisfied? What can be done? think about the whole system. Customer involvement

The End Game: An other alternative to brand revitalizing

What makes a brand prosper? Brand Equity Intensity and commitment of the competition Market demand

What will happen if one of these is unfavorable?

Are you going to Milk the brand or kill it?

The Milking options Avoiding investment in the brand as an attempt to generate additional cash flow from it. Sales decline is in an orderly way. We accept a decline in sales and profits and the risk of going down.

The strategy Hold: enough investment to hold the current position Fast milking: sharp reduction in operating expenditure Employee moral? Brand Manager motivation Competitors may attack vigorously secret strategy What if the decision was based on wrong research

The Divestment option Decline rate is rapid and accelerating Extreme price pressures Brand position is weak: a competitor achieved irreversible advantage The firm mission changes Exit barriers can be overcome : long term contract with suppliers.

Exit Problems Managerial pride Emotional attachment: family…

Practical exercise Form pairs of two and think of a brand you think needs revitalizing. What would you do to revitalize it? Increase usage Finding new uses Entering new markets Repositioning Augmenting the product

Making Interactivity Purposeful

Brand Contacts Be exposed to a brand message Two kinds: Created and Intrinsic Created: Adv. Promotions. PR releases Intrinsic: the contacts customers do in order to use a service or get a product. Flying experience. Intrinsic contact points need to be fully leveraged, maximizing not only the ability to supply information, but also their ability to listen to and gather information from customers.

How to Manage Brand Contacts Identify them Prioritize Which one captures feedback Determine the cost of controlling messages and gathering information for each contact point Which one can be used to carry additional brand messages and facilitate purposeful dialogue.

What NOT to do Do not use brand contact points to bombard customers with more brand messages.

The 5 Rs 1. 2. 3. Recourse: What if my computer doesn’t work? Recognition: customers like to be personally recognized. ‘call them by their names’. Database management! Responsiveness: 1 800 is just the first step. Stay with customers until the matter is solved.

The 5 Rs 4. Respect: non relevant telemarketing offers. Customers are willing to give you a half day on their schedule but not a minute on yours. Citibank direct -mail ( with a gift: tax guide): the purpose was to motivate customers to schedule a personal interview.

The 5 Rs 5. Reinforcement: Adv. For those who already purchased the product. It is better to include a feedback device.

“I don’t know who you are. I don’t know your company’s products. I don’t know what your company stands for. I don’t know your company’s customers. I don’t know your company’s reputation. Now - What was it you wanted to sell me? ” Mc. Graw-Hill Magazine Ad

What will a strong Brand do for you?

“I know who you are. I know your organization’s services. I know what your organization stands for. I know your organization’s customers/clients. I know your organization’s reputation. Now - Here is what I want. . . ”