Chapter 5 Market Communications and Branding

1. Chapter 5 Market Communications and Branding

2. Exhibit 5-1: Evolution of Customer Buying Process Awareness Consideration Preference Purchase Loyalty Buying Process • television ads • general interest magazines • television ads • general interest magazines • niche magazines • collateral • point-of sale promotions • direct marketing • product experience • buyers’ clubs Traditional MarketCommunication Early Web MarketCommunication • buttons • banners • sponsorships • banners • microsites • brochureware • web site • daily specials • sweepstakes • first-time order incentives • e-mail alerts • newsletters Source: Forrester Research, Monitor Analysis

3. Table 5-1: Framework for Marketing Communications Direct Personalized Individualized Audience Focus Traditional Mass Marketing General Approaches Broad Off-line On-line Communication Media

4. Direct Personalized • Permission Marketing • Personalized Recommendations • Personalized Advertisements • Personalized Web Pages • Personalized Upsell • Personalized E-commerce Table 5-2: The Four Categories of Communications • Salesforce • Retail sales • Customer service reps General Approaches Traditional Mass Marketing • Banner Ads • E-Mail • Viral Marketing • Portal Sponsorship/Exclusive Agreements • Associate Programs • On-line and Off-line Partnerships • Provide Information to Entice Customer Purchases • Leverage Customer Base • Television • Radio • Print • Billboards • Superior Customer Service

5. Supporting Slide 5-A: Quotes on On-Line Branding • “E-branding is more important [than e-commerce]. And it must come first. Because few people will buy your stuff -- on-line or off -- unless you are top-of-mind.” -- Annette Hamilton, Executive Producer, ZDNet • “Brand is the price of entry [to the internet], not the winning strategy.” -- Dylan Tweney, InfoNet • “By the time your potential customers log on, they already know what they're looking for, and they often know from whom they want to buy it. . . They're just not listening to branding messages anymore.” -- Michael Fischler, Principal of The Pubs Group • “Brands stand as comfort anchors in the sea of confusion, fear and doubt. In dynamic markets, strong brands have more value than ever, precisely because of the speed with which these markets move.” -- Chuck Pettis, Technobranding • “It took more than 50 years for Coca-Cola to become a worldwide market leader, but only five years for on-line search engine Yahoo! to gain market dominance. The role of the brand has changed dramatically and has created a vacuum between off-line and on-line brands.” -- Mark Lindstrom, Executive Director ZIVO • “A company's web site IS the brand. It's the hub of consumer experience, the place where all aspects of a company, from its annual report to its products to its support, intersect. It's the company in a nutshell, all there in a way that just is not possible in the analog world.” -- Sean Carton, Carton Donofrio Interactive

6. Point — Counterpoint Brand is Essential Brand is Side-show • Flood of new entrants. Too many brands. Hence, need to build your presence. • Strong brands -- customers come to you vs. you chasing customers. • All winners currently have strong brands. • It is an “instant message” that contains a lot of associations. • Conversion rates. Clear brand associated with higher conversion rates. • Alliances lock-up the market. Considerably more important than brands. • Third-party evaluator sites decrease power of brand (e.g., bizrate.com). • But… we expect a lot of well-known brands will go “belly-up” (e.g. beyond.com, FreePC). • Speed is more important than brand. Need to build customer base. • Everything about customization. It is a “personal” brand experience. Supporting Slide 5-B: Do Strong Brands Matter On-Line?

7. Exhibit 5-2: Banner Click-Through Rates Banner Click-Through Rates (Apr 1999-Jan 2000) Note: Source: Nielsen-NetRatings

8. Exhibit 5-3: What Is a Good Brand? • Mix of off-line and on-line advertising • Emphasizes advantages to AAdvantage memberships, including non-expiring miles and on-line services Marketing Communications “Wrap-arounds” • Superior service • AAdvantage frequent flier mile club • Award winning Admirals Club lounges • Comfortable chairs • Portable defibrillators on every flight CoreProduct /Service • Safe, on-time transportation from A to B Brand Prestige

9. Exhibit 5-4: A Simple Conceptual Model of Brand Equity A good brand... … provides positiveconsumer responses... … and benefits both target customers and the firm BRAND AWARENESS • Depth • Breadth CUSTOMER BENEFITS • Confidence • Loyalty • Satisfaction Market Communication “Wrap-arounds” CoreProduct /Service BRAND ASSOCIATIONS • Strength • relevant • consistent • Valence • Uniqueness • memorable • disinctive FIRM BENEFITS • Reduce marketing costs • Increased margins • Opportunity for brand extensions Source: Keller (1996), Aaken (1996), Strategic Market Research Group, Marketspace Analysis

10. Table 5-3: Types of Brands Traditional Brands On-line Brands • The product / service with which the brand is associated was established offline in the bricks-and-mortar world Examples: • The Gap • UPS • Dell • JCrew • McDonalds • OfficeMax • Ragu • Coca-Cola • Disney • The product / service with which the brand is associated was established in the online world Examples: • Amazon • Yahoo! • Chemdex • ZDNet • AOL • Priceline • CDNow • Wingspanbank • E*Trade

11. Exhibit 5-5: Brand Presence Mix of Promotional Activities Off-line On-line Online Brands Yahoo! Egghead Yahoo! Magazine ProductEstablishment Wingspan bank Schwab Ragu Traditional Brands Source: Monitor Analysis

12. Exhibit 5-6: Building an On-Line Brand • 1. Clearly define the brand audience • 2. Understand the customer • 3. Identify key leverage points in customer experience • 4. Continually monitor competitors • 5. Design compelling and complete Brand Intent • 6. Execute with integrity • 7. Be consistent over time • 8. Establish feedback systems • 9. Be opportunistic • 10. Invest and be patient Value Cluster Integrated Campaign

13. Table 5-4: Similarities and Differences in Off-Line vs. On-Line Branding

14. Table 5-4: Similarities and Differences in Off-Line vs. On-Line Branding, cont’d

15. Table 5-5: Case Studies of Successful On-Line Branding Efforts

16. Target Audience Product Scope Value Objective Component of Brand Equity Who do we want to target? What product / service are you offering them? What value do you want to derive from your on-line presence? What part of brand equity do you want to build? Broad vs. Focused (specific segments) Broad vs. Focused (specific products / services) Brand creation Brand awareness Sales leads Brand association Store traffic Product trial Customer Benefits Product sales Firm Benefits Brand reinforce-ment Exhibit 5-7: On-Line Branding Choices Source: Forrester Research, Monitor Analysis

17. Point — Counterpoint New Brand Use Existing Brand • An existing brand name limits the size of the user base • A single company brand name cannot be the “objective, third party portal (I.e. Travelocity will atract more visitors as compared to AA.com) • Existing brands are less likely to “get it” (e.g. less usable interfaces) • Enormous amounts of time and money are necessary to build new brands • Customer understands and will respond to a known brand • Customer will understand the value of being able to use both on-line and off-line services interchangeably • Target customers will not be confused Supporting Slide 5-C: Point-Counterpoint: New Brand vs. Use Existing Brand

18. Exhibit 5-8: www.aa.com

19. CVc = very low = low = moderate = high = very high Exhibit 5-9: Assessment of Key Branding Elements Comparison On-line Branding Best-in-Class American Airlines Continental CV CV

20. = very low = low = moderate = high = very high Exhibit 5-10: Assessment of Key Brand Attributes On-line Branding Best-in-Class Comparison American Airlines Continental

21. Exhibit 5-11: www.monster.com

22. Exhibit 5-12: Assessment of Key Branding Elements Comparison Online Branding Best-in-Class Hotjobs.com Monster.com

23. Exhibit 5-13: Assessment of Key Brand Attributes Online Branding Best-in-Class Comparison Monster.com Hotjobs.com