Marketing 101: Building Strong Brands

Part I

● What is marketing? It is a study of the market which is an exchange between two

partners, frequently a buyer and a seller.
● There should have an exchange-- which is needed in marketing to exist.
● The essence of marketing is to have a strong brand
● Marketing differs as a function of different aspects of those exchange.
● Sellers Market- the seller has a product, you have to come to the seller. The seller has
the power.
- Production: focus on the company, you should innovate the product,
reduce cost.
- Your business objective in a product-focused market is to sell as much as
you can, and profitability from a product-focused is going from selling
as much as you can.
- Profitability is tied to market share so it becomes your business objective.
- And why does market share increase profitability? Because the bigger
your market share, the more your revenues will be. And the bigger the
market share and the volume, the lower the product cost and hence
profitability.
- Higher revenues, lower cost, more profit.
- ‘I am the expert and I create the best product I can base on my expertise’
- “inside-out”
● Buyer’s market- where there is a lot of competition where there is a lot of products out
there and the buyer has the power.
- Marketing: Focus on customer and competition
- Focuses on the customer to buy from me rather than the competition.
- The best thing to do is to look at the customer wants and deliver a product
that meets the news of that customer.
- ‘What I’m going to do is to look at what the customer wants, and try to
create a product to meet that customer’s need.
- “Outside-in”
- What customers want to deliver value.
- The intuition is to pick and choose customers. Deliver value, say yes to
some customers and no to other customers.
- You make this profitable by picking and choosing the customers to want
to deliver and give them the exact value that they want in which they are
willing to pay for.
- Not focused on volume but on creating value
- The customers here are willing to pay the premium price and the profit
doesn’t come from a reduced cost. If you give me exactly what I want, ill
be willing to give you a higher price
 - Customer share- Giving the customers what they want time after time,
and not just based on one transaction, it is about building customer loyalty
and delivering value to that customer over time tat are willing to pay a
premium price.
- getting a more narrow market and getting more from each of
that-- customer wallets.
-Loyalty can be more profitable as you deliver value when doing
customer based marketing.
-Cross-selling- selling other things to you besides that one
specific product if you understand what they need.
● Connected community- If your message is being transmitted by customers to other
customers, they talk about the customer experience.
- It starts way before the transaction and goes way after the transaction.
- The marketer’s job in the age of globalization is that marketers need to be
completely transparent, have to be authentic, and has to focus on the entire
customer experience.
● Economic uncertainty- because of this marketers should build trust, focus on genuine
customer value( over time and in an experiential way).

● SUMMARY:

PRODUCT MARKETING EXPERIENCE TRUST

ORIENTATION ORIENTATION ORIENTATION ORIENTATION

Persuade the Persuade the Manage the Prioritize

customer to firm to offer customer’s building a
want what the what the entire relationship of
firm has customer experience trust and
wants with the firm discipline

PRODUCTS Generic Differentiated Experiential Genuine Value

THEY products Products/ Value
CREATE: Services

COMPETITIVE Lowest cost Quality and Transformation Trust

ADVANTAGE: service
Customers as
Customer co-creator of
Knowledge value

PROFITABILIT Market Share Customer Buzz, social Discipline-

Y DRIVERS: Share networks reduced cost

Customer WOM
Loyalty
Referrals
PART II:
3 Principles of Marketing:

1. Principle of Customer Value- You provide something from the customer

to a buyer and get them to buy from you rather than the competition, you
need to give them real, genuine customer value.
2. Principle of Differentiation- You have to provide customer value and
what the customer wants but you have to do it better than the competition.
Differentiate your offering.
3. Principle of Segmentation, Targeting, and Positioning- When you are
in a customer-focused market, you cannot deliver value to everybody. You
have to segment the market, choose your target, and position your brand.

Tools: 4 Ps of Marketing (Marketing mix)

1. Product- What the seller puts into the exchange.

2. Place- How the sellers deliver the product to the customer ie.
physical store, online store.
3. Promotion- The way the buyer and the seller communicates.
4. Price- What the buyer puts into the exchange of the product.

STRATEGIC MARKETING

Market-driven Principles:
1. Know your markets- Assume what your customers want and know
how your competition will react.
2. Customers have the final say- the customers kind of classify the
products into these three bundles, they give them a score in each
of these three dimensions. They decide which dimension is the
most important from them.
3. Commit to being first in the market you serve
 Value map:
- If you offer more benefits, customers are willing to pay a higher price. If you
charge a lower price, customers will expect fewer benefits, as long as what you offer
appears to be fair. If you offer something inferior and it's not fair value, then customers
won't buy that. So it, you won't make it in the market. And what the framework says is
that you need to offer fair value on two of those bundles, but offer something
better than fair value on one of the bundles, on the bundle you are going to be the
leader on.
- In this framework is to deliver the best of something and state fair value on the other two
bundles, the problem is fair value is not a static constant concept. It's constantly
changing as a function of competitive reaction

Strategic Leadership: “Bundles”

1. Operational Excellence-
2. Performance Superiority- The bundle that delivers the product design and style.
3. Customer Intimacy- Give the customers what they want. You deliver something that is
responsive to their needs.

Figure out:
1st: What are the product attributes that relate to operational excellence in your
market and define that dimension so that you understand what operational
excellence is in your market; what are the product attributes that matter to the
customer, are they design, technology. Figure out how much customization is
there in your market and define that dimension.

2nd: Anticipate where fair value is. What are the customers' expectations?
 3rd: plot. Where your company is delivering. Classify if you are meeting fair value
or below fair value on each one of these axes. Figure Out where your competition
is on this axis and then start playing the market strategy game.
Think about short term strategy, a long term strategy and figure out what
you should be doing now in order to beat the competition.

For a long term strategy, think about the best at one dimension and good enough
on the other two.

For the short term, it is to be customer intimate but you're not on fair value in
operations.

So for example if you are an operational company and that's what you want to be your
leadership strategy, that tends to be a very hierarchical strategy that, with allocation of
resources prioritized to information technology et cetera.

If you are a performance superiority company, that tends to be more of an R and D company.

You tend to hire kinds of people that are. Very innovative, they don't like structure, they don't like
top-down organization, you really need to give them a lot of free reign.

If in a customer intimacy, you really have to focus on prioritizing market research, customer
knowledge and you kind of have a consulting, a “yes” culture. You have to let the customer
come first. So each, once you decide on your leadership strategy has a lot of implications for the
rest of the firm.

SEGMENTATION AND TARGETING

● STP
● Segmentation- Identify variable that allow one to segment the market
● Targeting- Evaluate the attractiveness of each segment and choose a target segment.
● Positioning- Identify positioning concepts for each target segment, select the best, and
communicate it.
● If you did not segment this market, the optimal thing to do would be to give average
value to everything. And, what you would do, therefore, is not please anybody. The
average value here would not be not a low enough price for the people who care about
low prices. And not enough durability for the people who care about durability.
● Helpful for customer focused marketing
● What is a Market segment?
- Market segmentation is the process of dividing a market into distinct subsets,
where any subset may conceivably be selected as a marketing target to be
reached with a distinct marketing mix.
● Segmentation Method:
- Characteristics of the customers
 - Benefits sought
- Systematic, Product- related behavior (purchasing behavior)

1. Cohort Analysis

2. Geographic Segmentation
- Regional segmentation
- Zip Clustering- distinct marketing strategies created for similar types of
neighborhoods stretched across the nation.
● Select the target segment
What makes a segment attractive?
- Balancing segment attractiveness with our capability
- Continuously monitoring whether the actual buyers match the target
market.
● Segment selection criteria
- Segment size “how big is it?”
- Growth of segment “how much growth is there?”
- Value of segment “how much money do they have to spend”
- Stability ‘how stable is it”
- Current company position within segment ‘What's your current position with respect
to that segment”
- Ease of entry into segment “how easy is it for you to address the needs of that
segment”
- Ease of competitive entry into the segment “what about the competition? How
many people are going after that segment?”
- Number and strength of competitors “What's the strength of the competitors? Are
there potential competitors coming in?”

And what you want to do is pick the most attractive segment where you have a
differential advantage over the competition.

● Market Targeting
 - Develop measures of segment attractiveness.
- Select among attractive segments based on business capabilities.
High segment attractiveness + high competitive strength = perfect profit potential

BRAND POSITIONING

● What is a brand?
- A trademark for a product
- A “ contract” from the company to its customers; a promise of specific
benefits, quality, and value.
- A relationship
“A brand is no longer what we tell the customer it is- it is what consumers tell each other
it is” - Scott Cook from P&G

“It's not about telling and selling. It's about bringing a relationship mind-set to everything
we do.” - Jim Stengel, CMO of P&G

● Positioning statements
- When one company can be so differentiated from the ther company. They are
going after different target segments

Parts of a Positioning statement:

- Target Segment “who is the target segment”
- Point of difference “what is the point of difference that they're offering to
that target segment”
- What is the frame of reference “who are the other competitors that they
are comparing themselves to? “
● Positioning- Defining the value proposition in these three terms;
The target market (for whom)
The point of difference (reason to buy)
The point of parity (frame of reference)
● Point of parity (POP)- Associations that are not unique to the brand; they are shared with
other brands
- Category POPs- Associations consumer views as necessary to be considered
credible
- Competitive POPs- Associations designed to negate competitors’ point of
difference

● Point of Difference (POD)- strong, favorable, unique brand associations

Criteria:
- Are POD desirable to the consumer? Make it relevant and distinctive
- Can you deliver the POD to the customer? It should be feasible,
Communicable and sustainable
Brand Mantra: The Elevator Speech

- This is how you are going to define your brand in 30 seconds.

● Mental Map- “semantic associative network” It portrays brand associations and

responses for a target market. Shows how it is actually perceived.
- What comes to your mind when you think of the brand?
● Core Brand Values- Set of abstract concepts or phrases that characterize the five to ten
most important dimensions of the mental map of a brand.
- Should be related to your POP and POD
- Mental map -> Core brand values -> Brand mantra
● Brand mantra
- Heart and soul of a brand
- Similar to “ brand essence” or “core brand promise”
-short three to five word phrases that capture the irrefutable essence or
spirit of the brand positioning and brand values.
- Considerations: communicate, simplify, inspire
● Designing the brand mantra
- Brand function- describes the nature of the product or service or the type
of experiences or benefits the brand provides.
- Descriptive modifier- Further clarifies its nature.
- Emotional modifier- Provides another qualifier-- how exactly does the
brand provide benefits, and in what way?
● Brand mantra is used for:
- To guide decisions about what the brand should and should not associate with.
- “Tells what the brand is and tells what the brand is not”
Example:

Emotional Descriptive Brand Functions

Modifier Modifier

Nike Authentic Athletic Performance

Disney Fun Family Entertainment

Mcdonalds Fun Family Food

EXPERIENTIAL BRANDING

● What is an experience?
- Experiences are processes that occur as a result of encountering, undergoing or
living through situations.
- Triggered stimulations to the senses, heart and mind.
 - They connect the company and the brand to the customer’s lifestyle and place
individual customer actions and purchase occasions in a broader social context.

Differentiation - Experience
Promise - Relationship
Attributes - Personality
Static - Dynamic

● Connecting Experience to the brand:

Experiential brand positioning- what does the brand stand for
- Should be a multisensory strategy
- Should be different in awesome real valuable way from all
competitors
Experiential Brand Value promise- Describe what customers gets in experiential
terms

- Experiential components:
- The sensuous is across the five senses, you want to have a consistent
experience.
- The feel part is the emotions. You should appeal to the customer's inner
feelings and build strong emotions to it.
- The cognitive is the intellect. The thought process. The intrigue. The
surprise. Whatever is, but thoughts.
- The behavior is the way, how people act around it. It can be inspirational. It
can cause you to act in a certain way.
- And social is the part of the social system, the culture, that surrounds the
brand.
- Experiential within the 4Ps
- Product: build in experiential features
- Place: design, music, fragrance, type of salespeople
- Promotion: noteworthy, experiential, “brand personality”
- Price
● Strong brands vs weak brands
Strong brands:
- Make clear promises that are kept over time.
- Have rich, unique brand equity, strong thoughts and feelings
- Dependable and deliver consistently
- Have loyal customers

Weak brands:
- Make vague promises that change
- Very general equity and low emotional commitment
- Have “spotty” reputations, create doubt
- Little loyalty, rely on pricing and short term promotional incentives
Other characteristics of great brand:
- Consistency in delivering their promise
- Superior products and processes
- Distinctive positioning and customer experience
- Alignment of internal and external commitment to the brand.
- Ability to relevant