Building Strong Brands

Marketing’s most basic premise:

An exchange occurs between a buyer and a seller.

3 principles of marketing

  1. Customer value. What motivates the customer to want your product/service.
  2. Differentiation. What makes you stand out from the competition?
  3. Segmentation, targeting and positioning. Disecting your market horizon.

4 P’s of Marketing (Marketing Mix)

The fundamental ingredients of the “exchange”. Each of the P’s can altered independently from each other in very interesting ways.

  • Product. What the seller puts into the exchange.
  • Place. The method of distribution (e.g. a physical store, online).
  • Promotion. The way the seller communicates (e.g. advertising, sales) the benefits of the product to the buyer.
  • Price. What the buyer puts into the exchange.

4 P’s example to increase blood donations:

  • Product - the option for high school students to skip class. Cookies and orange juice. A badge.
  • Place - the bloodmobile, taking the product to the customer.
  • Promotion -
  • Price - blood, is what the customer puts into the exchange.

Product Orientation

Generic products. Lowest cost. Profitable with market share.

Persuade customer to want what the firm has.

Seller market; I’m the expert and my product is awesome, seller is in control. Product focused marketing (aka inside out) is best for sellers markets. The product undergoes innovation, and efficencies where possible such as maximum price reduction. Greater market share and more revenue.

Customer Orientation

Differentiated products or services. Strong customer knowledge and high quality. Profitable with customer share and loyalty.

Persuade firm to offer what the customer wants.

Customer market; lots of competition, customer is in control. Customer focused marketing (aka outside in) is therefore best for buyers markets. Look at what a customer wants, and do whats possible to meet the needs of that customer. Sadly this approach is hard. Every customer wants something different. You need to say yes to some, and no to others, and this is what segmentation is concerned with.

Ways customer based marketing is profitable:

  • Premium. The values comes from the ability to charge a premimum to satisfy the portion of customers you are willing to say “yes” to, and to tend to their exact needs.
  • Loyalty. Giving the customer what they want, time after time after time. Customer loyalty. Customer share (or share of wallet). A narrow market, but can be very deep and profitable. Once you determine a formula for satifying a customers exact need, is that it scales. You’ve figured out the formula. You become more efficient by cookie cutting the same formula.
  • Cross selling.

Experience Orientation

Experiental value. Transformation; the customer is a co-creator of value. Profitable with buzz, word-of-mouth, and referrals.

Evolved around customers interacting with other customers. Amplified through social networking. Manage the customers entire experience with the firm.

Trust Orientation

Genuine value.

When markets or times are tough. Priotise building a relationship of trust and disipline. Profitable with trust and reduced costs.

Strategic Marketing

Market driven principles

In this framework, you must believe/abide in:

  • Know your markets. Through research. Facts on the table. You know what your customers want. You know how your competitors are likely to react. Trying to find a way to provide customer value, better than the competition (i.e. differentiation).
  • Customers have the final say. There is too much data out available for the run of the mill customer to evaluate everything. So things are generally chunked up into these buckets (1) the operational bucket (e.g. price, delivery, service reliability), (2) the product features or design bucket, and (3) does it my specific needs. You must strive to be the market leader on the one bucket/vector, and good enough on the other two.
  • Fair value. The price is consistent with the benefits offered by the product/service. You need to offer fair value on two of the vectors/buckets, and something better than fair on the other one (your leader bucket).

Strategies for leadership (the buckets/vectors)

  • Operational competence - operational excellence
  • Product differentiation - performance superiority
  • Customer responsiveness - customer intimacy

One framework, is to:

  1. define the above buckets for my company, and what constitutes fair value for each. An example, in the airlines industry customers expect timeliness and punctuality. Given this operational competence attribute, most fall below fair value.
  2. Understand where the competition fall.
  3. Start playing the marketing strategy game. Short term (what should you be doing right now to beat the competition) and long term (to be the best at one dimension and good enough for the other two). An example, might be to reach fair value operationally but long term to be the leader at customer intimacy.

The choice of dimension has big implications to the DNA of company. Example, focus on being the operational leader translates to hierarchical structures, performance superiority tends to be more R&D focused and innovative, and customer intimacy prioritising market research and knowledge “a yes culture” where the customer is rules.

Segmentation and Targeting

Market segementation 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 (4 P’s).

The STP framework

  1. Segmentation - identify variables that allow one to segment the market (e.g. price, durability and cosmetic beauty).
  2. Targeting - evaluate the attrativeness of each segment and choose a target.
  3. Positioning - identify the positioning concepts for each target segment, select the best and communicate it.

Segementation methods:

  • Demographic / characteristics of the customer (e.g. male/female, rich/poor, young/old)
  • Product benefits sought by the customer (e.g. comfort, technology, productivity, improved health)
  • Product related behaviors (e.g. online vs in-store purchasers, yearly purchasers)
  • Cohort analysis.
  • Geographies - distinct marketing strategies created for similar types of neighborhoods scaled across the nation. Another popular method called PRIZM.

Cohort analysis

Based on generation groups (e.g. baby boomers, gen X). Coming of age date ranges are very interesting to marketers. For example:

Generation Y (aka Milenials) First “electronic” generation completely raised on the computer. Social networks. Wifi. Dislike mass marketing. Don’t read newspapers. Socially responsible.

  • Born: 1977 - 1997
  • Coming of age: 1995 - 2015
  • Share of population: 30%

Segment Selection Criteria

Measures of segment attractiveness.

Ranking criteria:

  • Segment size.
  • Growth of segment.
  • Value of segment ($).
  • Stability.

Barrier of entry to the segment:

  • Current company position within segment.
  • Ease of entry into segment.


  • Ease of competitive entry into segment.
  • Number and strength of competitors.

Pick the segment that offers the greatest differential advantage over competitors.

Brand Positioning

What’s a brand?

To the legally minded:

a proprietary trademark for a specific product or service.

To a marketer:

A contract from the company to its customers; a promise of specific benefits, quality and value. A relationship.


The brand is no longer what we tell the consumer it is. It is what consumers tell us it is.

A Positioning Statement

Defines the value proposition of product to the target market.

  • Target market (for whom)
  • Point of difference (reason to buy)
  • Points of parity (frame of reference)

Positioning is implemented through all elements of the marketing mix: product, place, promotion and price.

Focus on a few key benefits (unique selling proposition).

Must be defensible (that you own and cant be copied easily).

Requires making choices (don’t try to be everything, i.e. the lukewarm tea dillema…nobody wants this, either make hot or iced tea).

The Role of Positioning

  • Strategic and technological vision - determines positioning
  • Product development - positioning determines customer benefits to target
  • Messaging - positioning determines the story you tell. A tactical concern; what colour, what logo.

Point of Parity (POP)

Associations that are not unique to the brand; they are shared with other brands (e.g. personal computing and Apple).

Category POPs are associations consumer views needed to be considered credible (e.g. a grocery store must have certain products like milk to be considered truly a grocery store).

Competitive POPs are associations designed to negate competitors point of difference (e.g. flouride in toothpaste to prevent cavities…all brands quickly introduced this compound).

Point of Difference (POD)

Strong, favourable, unique brand associations.

Sustainable or SCA (Sustainable Competitive Advantage). Hold the advantage for a prolonged period of time.

May involve performance attributes, benefits, imagery associations.

POD selection criteria

Is the POD desirable to the customer?

  • Relevant (e.g. clear cola)
  • Distinctive and superior

Can you deliver the POD to the customer?

  • Feasibility (affordable, possible, e.g. can airlines deliver on-time arrival)
  • Communicability
  • Sustainability (internal commitment, difficult to attack)

Example, Apple Computers:

We offer the best personal computing experience to students, educators, creative professionals and consumers around the world through its innovative hardware, software and Internet offerings.

A positioning statement can be broken down into 3 pieces:

  • Target segment (students, creative professionals)
  • Point of difference (innovative)
  • Frame of reference (who are the other competitors they are comparing to, in this case personal computing experience)

Brand Mantra - The Elevator Speech

Used internally to guide decisions. What it should and should not be (this is a nike, this is not a nike).

You want to end up with a 30 second speal. The essence of the brand.

Use a mental map to show associations and responses for a target market. Ask consumers “what comes to mind when you think about [brand]?”. Brand associations are grouped into categories.

Flesh out the top 10 most important. Relate to points of difference and points of parity. Distilling the core brand values. The brand mantra.

Designing the brand mantra

The brand function describes the nature of the product or the benefits the brand provides.

The descriptive modifier further clarifies its nature.

The emotional modifier - how exactly does the brand provide benefits and in what way?

Example, McDonalds. Emotional = fun, descriptive = family, function = food.

Experiential Branding

Experiences are processing that occur as a result of living through situations.

Triggered stimulations.

Connect the companies brand to the customer’s lifestyle, and place individual customer actions and purchase events in a broader social context.

Redefining What a Brand Is:

  • Differentiation
  • Relationship (Apple, Aber Crombie)
  • Personality - think of the brand as a friend
  • Individual
  • Relevance

Experiental Components

  • Five senses. consistent experience across the senses.
  • Emotions. Appeal to customers' inner feelings and emotions.
  • Cognitive. Appeal to the intellect; engage customers creatively, problem solving experiences, use of suprise.
  • Behave. Enrich customer lives, show them alternative ways of doing things,
  • Social. Create feeling of community or belonging. The future “ideal self” that the consumer wants to relate to.

Characteristics of great brands

  • Consistency
  • Superior
  • Distinctive - (e.g. pepsi, coke)
  • Alignment - internal and external commitment to the brand.
  • Relevant - the brand is flexible and adaptable, and can change with the customer.