Building Brands

Steps of Building Strong Brands

1. Identify and profile distinct groups of buyers who differ in their

needs and wants (market segmentation).
2. Select one or more market segments to enter (market targeting).
3. For each target segment, establish, communicate, and deliver the
right benefit(s) for the company’s market offering (market
positioning).
Market Segmentation
• Market segment consists of a group of customers who share a similar
set of needs and wants. The marketer’s task is to identify the
appropriate number and nature of market segments and decide
which one(s) to target.
• Regardless of which type of segmentation scheme marketer use, the
key is adjusting the marketing program to recognize customer
differences.
• The major segmentation variables—geographic, demographic,
psychographic, and behavioral segmentation
Importance of segmentation
• Market segmentation helps the marketers to understand the needs of
customer
• Identify market opportunities
• Create effective marketing strategies
• Differentiating brand from competitors
Bases for Segmenting Consumer
Markets/Types of segmentation
• Geographic Segmentation:
• Geographic segmentation divides the market into geographical units such as
nations, states, regions, counties, cities, or neighborhoods.
• More and more, regional marketing means marketing right down to a specific
zip code. Ex: marketers might focus their marketing efforts around urban city
areas where their target customer are living.
• Demographic Segmentation:
• Segmentation based on demographic variables such as age, family size, family
life cycle, gender, income, occupation, education, religion, race, generation,
nationality, and social class.
• It is one of the most popular and commonly used types of market
segmentation. It refers to statistical data about a group of people
Bases for Segmenting Consumer Markets
• Psychographic Segmentation:
• In psychographic segmentation, buyers are divided into groups on the basis of
psychological/personality traits, lifestyle, or values. Eg segmentation based on based
on different personality trait : creative, emotional, friendly, opinionated, introvert,
extrovert .
• Psychographic segmentation factors are slightly more difficult to identify than
demographics because they are subjective. They are not data-focused and require
research to uncover and understand.
• Understand customer concerns by analyzing their personalities, lifestyles, or social
status.
• This segmentation type is important when customization of products and services is
involved.
• As it provides details about factors such as lifestyles, interests, opinions, etc., it is
much more effective than geographic or demographic segmentation.
• It is an extension of behavioral segmentation and offers options to divide the
population-based into attitudes or opinions as well.
 Bases for Segmenting Consumer Markets
• Behavioral Segmentation:
• Behavioral segmentation requires you to know about your customer’s actions.
These activities may relate to how a customer interacts with your brand.
• It is the process of dividing the total market into smaller similar groups based on
the buying behavior of the customer.
• In behavioral segmentation, marketers divide buyers into groups on the basis of
their purchasing habits, spending habits, or user status.
Bases for Segmenting Consumer Markets
Behavioral Segmentation may be based on
• Decision Roles: Ex: People play five roles in a buying decision: Initiator,
Influencer, Decider, Buyer, and User
• User and Usage-Related Variables
• Occasions: Occasions mark a time of day, week, month, year, or other well-
defined temporal aspects of a consumer’s life.
• User Status: Every product has its nonusers, ex-users, potential users, first-time
users, and regular users.
• Usage Rate: We can segment markets into light, medium, and heavy product
users.
• Buyer-Readiness Stage: Some people are unaware of the product, some are
aware, some are informed, some are interested, some desire the product, and
some intend to buy.
• Loyalty Status: Loyalty Status
Marketers usually envision four
groups based on brand loyalty status:
1. Hard-core loyals—Consumers who buy
only one brand all the time
2. Split loyals—Consumers who are loyal
to two or three brands
3. Shifting loyals—Consumers who shift
loyalty from one brand to another
4. Switchers—Consumers who show no
loyalty to any brand
• Multiple Bases: Combining different
behavioral bases can provide a more
comprehensive and cohesive view of
a market and its segments.

Figure: Behavioral Segmentation Breakdown

 Demographic
Industry: Which industries should we serve?

Segmenting
Company size: What size companies should we serve?
Location: What geographical areas should we serve?

Business Operating Variables

Technology: What customer technologies should we focus on?

Markets: User or nonuser status: Should we serve heavy users, medium users, light users, or
nonusers?
Purchasing Approaches
Major Purchasing-function organization: Should we serve companies with a highly centralized
or decentralized purchasing organization?

Segmentati Purchasing criteria: Should we serve companies that are seeking quality? Service? Price?
Situational Factors
on Urgency: Should we serve companies that need quick and sudden delivery or service?
Size or order: Should we focus on large or small orders?
Variables Personal Characteristics
Buyer-seller similarity: Should we serve companies whose people and values are similar
to ours?
Loyalty: Should we serve companies that show high loyalty to their suppliers?
Market Targeting
To be useful, market segments must rate favorably on five key criteria:
• Measurable: The size, purchasing power, and characteristics of the
segments can be measured.
• Substantial: The segments are large and profitable enough to serve. A
segment should be the largest possible homogeneous group worth going
after with a tailored marketing program. It would not pay, for example, for
an automobile manufacturer to develop cars for people who are under four
feet tall.
• Accessible: The segments can be effectively reached and served.
• Differentiable: The segments are conceptually distinguishable and respond
differently to different marketing mix elements and programs.
• Actionable: Effective programs can be formulated for attracting and serving
the segments.
Selecting the Market Segments
• Marketers have a range or continuum of possible levels of segmentation
that can guide their target market decisions.
• As Figure shows, at one end is a mass market of essentially one
segment; at the other are individuals or segments of one person each.
Between lie multiple segments and single segments.
 Full Market Coverage
• With full market coverage, a firm attempts to serve all customer
groups with all the products they might need. Only very large firms
such as Microsoft (software market), General Motors (vehicle
market), and Coca-Cola (nonalcoholic beverage market) can
undertake a full market coverage strategy.
• Undifferentiated marketing is appropriate when all consumers have
roughly the same preferences and the market shows no natural
segments.
Multiple Segment Specialization
• With selective specialization, a firm selects a subset of all the possible
segments, each objectively attractive and appropriate. Each segment
promises to be a moneymaker.
• The multisegment strategy also has the advantage of diversifying the
firm’s risk.
Understanding Positioning and Value
Propositions
• Positioning is the act of designing a company’s offering and image to
occupy a distinctive place in the minds of the target market.
• The goal is to locate the brand in the minds of consumers to maximize the
potential benefit to the firm.
• A good brand positioning helps guide marketing strategy by clarifying the
brand’s essence, identifying the goals it helps the consumer achieve, and
showing how it does so unique in a way.
• A well-positioned brand should be distinctive in its meaning and execution.
• One result of positioning is the successful creation of a customer-focused
value proposition (a value proposition captures the way a product or
service’s key benefits provide value to customers by satisfying their needs),
a cogent reason why the target market should buy a product or service.
Positioning Process
1. Choosing a frame of reference by identifying the target market and
relevant competition.
2. Identifying the optimal points-of-parity and points-of-difference
brand associations given that frame of reference, and
3. Creating a brand mantra that summarizes the positioning and
essence of the brand.
Choosing a Competitive Frame of Reference
• The competitive frame of reference defines which other brands a
brand competes with and which should thus be the focus of
competitive analysis.
• Identifying Competitors: A good starting point in defining a competitive frame
of reference for brand positioning is category membership—the products or
sets of products with which a brand competes and that function as close
substitutes. It would seem a simple task for a company to identify its
competitors.
Identifying Potential Points-of-Difference
and Points-of-Parity
• Once marketers have fixed the competitive frame of reference for positioning by
defining the customer target market and the nature of the competition, they can
define the appropriate points-of-difference and points-of-parity associations.
• Points-of-Difference Points-of-difference (PODs) are attributes or benefits that
consumers strongly associate with a brand, positively evaluate, and believe they
could not find to the same extent with a competitive brand. Associations that
make up points-of-difference can be based on virtually any type of attribute or
benefit.
• Points-of-Parity Points-of-parity (POPs), on the other hand, are attribute or
benefit associations that are not necessarily unique to the brand but may in fact
be shared with other brands.
• Ex-Subway restaurants are positioned as offering healthy, goodtasting
sandwiches. This positioning allows the brand to create a POP on taste and a POD
on health with respect to quick-serve restaurants such as McDonald’s and Burger
King
Creating a brand mantra
• To further focus brand positioning and guide the way their marketers
help consumers think about the brand, firms can define a brand
mantra.
• A brand mantra is a three- to five-word articulation of the heart and
soul of the brand and is closely related to “brand essence” and “core
brand promise”.
• Brand mantras are powerful devices. By highlighting points-of-
difference, they provide guidance about what products to introduce
under the brand, what ad campaigns to run, and where and how to
sell the brand.
Understanding Brand equity
• Brand equity refers to the perceived worth of a brand in and of
itself—i.e., the social value of a well-known brand name.
• It is based on the idea that the owner of a well-known brand name
can generate more revenue simply from brand recognition, as
consumers perceive the products of well-known brands as better than
those of lesser-known brands.
• Brand equity is the added value endowed to products and services
with consumers. It may be reflected in the way consumers think, feel,
and act with respect to the brand, as well as in the prices, market
share, and profitability it commands.
Brand elements
Choosing Brand Elements Brand elements are devices, which can be used to identify and
differentiate the brand.
Brand Element Choice Criteria: There are six criteria for choosing brand elements. The
first three—memorable, meaningful, and likable—are brand building. The latter three—
transferable, adaptable, and protectable—are defensive and help leverage and preserve
brand equity against challenges.
• Memorable—How easily do consumers recall and recognize the brand element, and
when—at both purchase and consumption? Short names such as Tide, Crest, and Puffs
are memorable brand elements.
• Meaningful—Is the brand element credible? Does it suggest the corresponding
category and a product ingredient or the type of person who might use the brand
• Likable—How aesthetically appealing is the brand element? A recent trend is for playful
names that also offer a readily available URL, especially for online brands like Flickr,
Instagram, Pinterest, Tumblr, Dropbox, and others.
• Transferable—Can the brand element introduce new products in the same or different
categories? Does it add to brand equity across geographic boundaries and market
segments?
• Adaptable—How adaptable and updatable is the brand element? Logos can easily be
updated. The past 100 years have seen the Shell logo updated 10 times.
• Protectable—How legally protectable is the brand element? How competitively
protectable? When names are in danger of becoming synonymous with product
categories—as happened to Xerox—the makers should retain their trademark rights and
not allow the brand to become generic.