Brand

A name becomes a brand when consumers associate it with a set of tangible and
intangible benefits that they obtain from the product or service
It is the seller’s promise to deliver the same bundle of benefits/services consistently
to buyers
Commodity
A commodity is some good for which there is demand, but which is supplied
without qualitative differentiation across a market
Brand Equity
When a commodity becomes a brand, it is said to have equity.
The premium a brand can command in the market
The difference between the perceived value and the intrinsic value
Brand Power
Customer will change brands for price reasons
Customer is satisfied. No reason to change.
Customer is satisfied and would take pains to get the brand
Customer values the brand and sees it as a friend
Customer is devoted to the brand

Brand Equity – Competitive Advantages

Reduced marketing costs
Trade leverage
Can charge a higher price
Can easily launch brand extensions
Can take some price competition
Managing Brand Equity
Brand Equity needs to be nourished and replenished. We must not flog the brand for
equity to be diluted or dissipated
Store brands
Advantages of branding
Easy for the seller to track down problems and process orders
Provide legal protection of unique product features
Branding gives an opportunity to attract loyal and profitable set of customers
It helps to give a product category at different segments, having separate bundle of
benefits
It helps build corporate image
It minimises harm to company reputation if the brand fails
Brand parity
Consumers buy from a set of acceptable/ preferred brands

Umbrella Brand
Products from different categories under one brand
Dangerous to the brand if the principal brand fails
Sometimes the company name is prefixed to the brand. In such cases the company
name gives it legitimacy. The product name individualises it.
Naming the Brand
Product benefits
Product qualities
Easy to pronounce
Should be distinctive
Should not have poor meanings in other languages and countries
Brand strategy
Line extension – existing brand name extended to new sizes in the existing product
category
Brand extension – brand name extended to new product categories
Multibrands – new brands in the same product category
New brands – new product in a different product category
Cobrands –brands bearing two or more well known brand names
Brand Repositioning
This may be required after a few years to face new competition and changing
customer preferences
 Dealing with Competition & Competitive strategies
Knowledge is a source of advantage
Customer Knowledge

Competitor Knowledge
Both are critical for better strategies
Competitive Strategies based on Levels of Knowledge
Porter’s 5 force Model for competition
Strategies to deal with competition
Market Leader Strategy
Market Challenger Strategy
Market Follower Strategy
Market-Nicher Strategy

Competitive Advantage
Having a competitive advantage is necessary for a firm to compete in the market
But what is more important is whether the competitive advantage is sustainable
A firm must identify its position relative to the competition in the market
By knowing if it is a leader, challenger, follower or nicher, it can adopt appropriate
strategies to compete

Sustainable Competitive Advantage

A good strategist seeks not only to “win the hill, but hold on to it.”
Subash Jain
Sustaining competitive advantage requires erecting barriers against the competition
Aakers suggested looking at the following:
How you compete
Basis of competition
Where you compete
Whom you are competing against

Examples of SCA
For many years, Singapore Airlines were riding on its SCA of having the best in-flight
service
As more airlines improved their service and narrowed the gap, SIA sought other
competitive advantages among which are
The most modern fleet
Outstanding Service on the Ground
A super entertainment system in its cabins
Comfort in its First Class cabins at an unparallel level
Are the later initiatives sustainable?
Sun Tze’s defensive strategy
“Do not assume the enemy will not come
but be prepared for his coming…
Do not presume he will not attack,
but instead make your own position unassailable.”
Strategies for Market Leaders
Market Leader’s objectives:
Expand the total market by
Finding new users
Creating new uses, and
Encouraging more usage
Protect its current market share by
Adopting defense strategies (see following slides)
Increase its market share
Note the relationship between market share and profitability
Which strategy to use?
Depends on your answer to the following:
Is it worth fighting?
Are you strong enough to fight?
How strong is your defense?
Do you have any choice but to fight?

Defense Strategy
A market leader should generally adopt a defense strategy
Six commonly used defense strategies
Position Defense
Mobile Defense
Flanking Defense
Contraction Defense
Pre-emptive Defense
Counter-Offensive Defense
Defense Strategy (cont’d)
Position Defense
Least successful of the defense strategies
“A company attempting a fortress defense will find itself retreating from line after
line of fortification into shrinking product markets.” Saunders (1987)
e.g. Mercedes was using a position defense strategy until Toyota launched a frontal
attack with its Lexus.
Defense Strategy (cont’d)
Mobile Defense
By market broadening and diversification
For marketing broadening, there is a need to
Redefine the business (principle of objective), and
Focus efforts on the competition (the principle of mass)
e.g. Legend Holdings, the top China PC maker Legend has announced a joint
venture with AOL to broaden its business to provide Internet services in the
mainland
Defense Strategy (cont’d)
Flanking Defense:
Secondary markets (flanks) are the weaker areas and prone to being attacked
Pay attention to the flanks
e.g. Jet Airways introduced a low cost product by acquiring “Sahara Airlines”

Defense Strategy (cont’d)

Contraction Defense
Withdraw from the most vulnerable segments and redirect resources to those that
 are more defendable
By planned contraction or strategic withdrawal
e.g. India’s TATA Group sold its soaps and detergents business units to Unilever in
1993

Defense Strategy (cont’d)

Pre-emptive Defense
Detect potential attacks and attack the enemies first
Let it be known how it will retaliate
Product or brand proliferation is a form of pre-emptive defense e.g. Maruti Suzuki
Defense Strategy (cont’d)
Counter-Offensive Defense
Responding to competitors’ head-on attack by identifying the attacker’s weakness
and then launch a counter attack
e.g. Toyota launched the Lexus to respond to Mercedes attack
Market Challenger Strategies
The market challengers’ strategic objective is to gain market share and to become
the leader eventually
How?
By attacking the market leader
By attacking other firms of the same size
By attacking smaller firms

Market Challenger Strategies (cont’d)

Types of Attack Strategies
Frontal attack
Flank attack
Encirclement attack
Bypass attack
Guerrilla attack
Frontal Attack
Seldom work unless
The challenger has sufficient fire-power (a 3:1 advantage) and staying power,
and
The challenger has clear distinctive advantage(s)
e.g. Japanese and Korean firms launched frontal attacks in various ASPAC countries
through quality, price and low cost
Flank attack
Attack the enemy at its weak points or blind spots i.e. its flanks
Ideal for challenger who does not have sufficient resources
e.g. In the 1990s, Yaohan attacked Mitsukoshi and Seibu’s flanks by opening
numerous stores in overseas markets
Encirclement attack
Attack the enemy at many fronts at the same time
Ideal for challenger having superior resources
e.g. Seiko attacked on fashion, features, user preferences and anything that might
interest the consumer
Bypass attack
By diversifying into unrelated products or markets neglected by the leader
Could overtake the leader by using new technologies
e.g. Pepsi use a bypass attack strategy against Coke in China by locating its bottling
plants in the interior provinces
Guerrilla attack
By launching small, intermittent hit-and-run attacks to harass and destabilize the
leader
Usually use to precede a stronger attack
e.g. airlines use short promotions to attack the national carriers especially when
passenger loads in certain routes are low
Which Attack Strategy should a Challenger Choose?
Use a combination of several strategies to improve market share over time
Market-Follower Strategies
Theodore Levitt in his article, “Innovative Imitation” argued that a product imitation
strategy might be just as profitable as a product innovation strategy
e.g. Product innovation--Sony
Product-imitation--Panasonic
Market-Follower Strategies (cont’d)
Each follower tries to bring distinctive advantages to its target market--location,
services, financing
Four broad follower strategies:
Counterfeiter (which is illegal)
Cloner e.g. the IBM PC clones
Imitator e.g. car manufacturers imitate the style of one another
Adapter e.g. many Japanese firms are excellent adapters initially before
developing into challengers and eventually leaders

Market-Nicher Strategies
Smaller firms can avoid larger firms by targeting smaller markets or niches that are
of little or no interest to the larger firms
e.g. Logitech--mice
Microbrewers--special beers
Market-Nicher Strategies (cont’d)
Nichers must create niches, expand the niches and protect them
e.g. Nike constantly created new niches--cycling, walking, hiking,
cheerleading, etc
What is the major risk faced by nichers?
Market niche may be attacked by larger firms once they notice the niches are
successful
Multiple Niching
“[A] firm should `stick to its niching’ but not necessarily to its niche. That is why
multiple niching is preferable to single niching. By developing strength in two
or more niches the company increases its chances for survival.”
Philip Kotler
 Market Segmentation
Segmentation
Market Segment is a specific group of customers with similar needs, purchasing
behavior & identifying characteristics
The segments should be measurable in terms of size & purchasing power,should be
accessible & should be substantial in size
Key steps in Segmentation Process
Needs-Based segmentation
Segment Identification
Segement attractiveness
Segment profitability
Segment positioning
Segment “Acid test”
Marketing Mix strategy for the segment
Segmentation Strategies
Mass Market approach (Coca-cola,Ford)
Large Market Strategy(Hero Honda)
Adjacent Market Strategy (Toyota)
Multi-Segment strategy (Maruti)
Small Segment strategy
Niche Segment Strategy(Revolution,espn,Himalaya)
Sub-segment strategy(Car,SUVs)

Bases For Segmentation for consumer markets

Geographic – Region, City, Rural etc
Demographic – Age, Family size, Gender, Income, Occupation, Eductn
Psychographic – Socioeconomic, Lifestyle, Personality
Behavioral – Occasions, Benefits, User Status, Usage Rate, Loyalty Status,
Readiness stage etc
Consumer Market Forces
Bases for segmentation of Business Markets
Demographic
Operating Variables – Technology,Capabilities
Purchasing approaches – Power structure,Relationship,Policies,Criteria
Situational Factors – Urgency, Specific Application,Size or order
Personal charaxcteristics
Business Market Forces
 Marketing Communication
The role of Marketing Communication
They are means by which firms attempt to inform, persuade & remind – directly or
indirectly – about the product and brand they sell
Marketing Communication Mix
Advertising
Sales Promotion
Events & Experiences
Public Relations & Publicity
Direct Marketing
Interactive marketing
Word-of mouth marketing
Personal Selling
Purpose
Consumer Response
Awareness
Knowledge
Liking
Preference
Conviction
Purchase

Steps in Developing Effective Comm Model

Identify Target Market
Determine the objectives
Design Communication ( Message strategy & Creative strategy)
Select Channel (Personal & Non-personal)
Establish Budget
Decide on Media Mix
Measure results
Managet Integrated marketing communication
5 Ms of Advertising
Mission – What are the objectives?
Money – How much can we spend?
Message – What message?
Media – What media shoud be used?
Measurement - How to evaluate results

Mission?
Informative advertising
Persuasive Advertising
Riminder Advertising
Reinforcement Adviertising
Money
Ad spend depends on the stage in PLC
Market Share and customer base
Competition & Clutter
Advertising frequency
Product substitutability ( Beer, Softdrinks,Banks,Airlines)
Message
Message Generation & Evaluation
Creative Development & Execution
- Television Ads
- Print Ads
- Radio Ads
- Film Ads
Legal Issues
Media
Reach frequency and impact
Media Types (Newspaper,TV,Magazines,Yellow pages,Internet etc)
Alternative Advertising options ( Billboards)
Media Timings and Allocation

Measurement
Communication effect Research
Sales effect research
 Pricing
Price is only the tip of the Iceberg
Steps in setting a Price
Selecting Pricing Objective – Survival,Maximum current profit,Maximum Market
Share,Product qlty leadership etc
Determining Demand – Price sensitivity
Estimating Costs
Analysing Competitors’ Costs,Prices
Pricing Orientation
Selecting Pricing Method
Mark Up Pricing
Target Return Pricing
Perceived Value Pricing
Value Pricing (Rengineering the prices)
Going Rate Pricing ( Based on competitors’ pricing)

Adapting the price

Geographical Pricing
Price discounts and allowances
Promotional pricing
Differentiated pricing
Price Changes
Initiating Price Cuts

Initiating Price increases

 Product Management Over the Product Life Cycle
What is the Product Life Cycle?
Describes the stages a product goes through in the marketplace including
introduction, growth, maturity, and decline.
PLC can apply to:
Product category (watches)
Product form (digital)
Product brand (Timex)

I. Introductory Stage
A. Characteristics
Low sales volume
High costs
No or little direct competition
Basic product configuration

B. Strategies
Develop primary demand by building awareness and educating consumers
Stimulate opinion leaders to buy the product
Build channels of distribution (selective in the beginning)
Two pricing strategies:
price skimming – introduce at high price
price penetration – introduce at low price

II. Growth Stage

A. Characteristics
Sales volume increases significantly
Costs per unit decrease
Competition increases
More product variation

Strategies
Engage in product modification
Build selective demand; stress differentiation
Move toward intensive distribution
Practice more aggressive pricing

III. Maturity Stage

A. Characteristics
Sales growth slows then levels off
Profits decline for the industry
Marginal competitors leave marketplace

B. Strategies
Rejuvenate product – change packaging, new
 models, line extensions
Stimulate usage rate
Maintain brand loyalty through reminder promotions
Continue aggressive pricing
Continue intensive distribution
IV. Decline Stage
A. Characteristics
Strong downward shift in sales
Profits stay low and continue to decline
Only a few strong competitors remain
Back to basic product configurations

B. Strategies
Distribution reduced to fewer outlets
Promotional support reduced
Prices lowered
Use harvesting strategy

Product life cycles vary in length

Product life cycles are getting shorter