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Chapter 1: Strategic Brand Communication

Chapter 1

Strategic Brand Communication

CHAPTER CONTENT

KEY OBJECTIVES

1. What is the marketing mix, and how does it send messages?

2. What is integrated marketing communication?

3. Understand how this text will prepare you for your career.

CHAPTER OVERVIEW

This chapter opens by providing a definition of both marketing and marketing

communication, which is followed by a discussion of the marketing industry’s key players

and the most common types of markets pursued, as well as the concept of added value.

CHAPTER OUTLINE

THE MARKETING FOUNDATION

 Traditionally, the goal of most marketing programs has been to sell products, defined

as goods, services, or ideas. Marketing’s sales goals respond to the marketplace,

The Marketing Mix

 Marketing accomplishes its goal by managing a set of operations and strategic

decisions referred to as the marketing mix, also called the four Ps. These include the

design and performance of the product, its distribution, its pricing strategies, and its

promotion. These four Ps all deliver messages about the brand.

Chapter 1: Strategic Brand Communication

Marketing and Messages

 Marketing communication (marcom) involves the use of a variety of tools and

functions, such as advertising, public relations, sales promotion, direct response

events and sponsorships, point of sale, digital media, and the communication aspects

of packaging, as well as personal sales and new forms of online communication that

are constantly being developed.

Who Are the Key Players?

 The marketing industry is a complex network of professionals. The four categories of

key players include 1) marketers, 2) marketing partners, such as advertising and

public relations agencies, 3) suppliers and vendors, and 4) distributors and retailers.

1. The marketer is any company or organization behind the product, that is, the

organization, company, or manufacturer producing the product and offering it for

sale. To marketing communication partners, the company or firm behind the

brand is referred to as the client.

What Are the Most Common Types of Markets?

 The word market originally meant the place where the exchange between seller and

buyer took place. Today, we speak of a market not only as a place but also as a

particular type of buyer — for example, the youth market or the motorcycle market.

The phrase share of market refers to the percentage of the total market in a product

category that buys a particular brand.

Chapter 1: Strategic Brand Communication

 As Figure 1.1 shows, the four main types of markets are 1) consumer, 2) business-to-

business (or industrial), 3) institutional, and 4) channel markets. We can further

divide each of these markets by size or geography.

 Consumer markets (B2C) refers to businesses selling to consumers who buy

goods and services for personal or household use. As a student, you are

considered a member of the consumer market for companies that sell jeans,

athletic shoes, sweatshirts, pizza, music, textbooks, backpacks, computers,

education, checking accounts, bicycles, travel, and a multitude of other products.

How Does the Marketing Mix Send Messages?

 Marketing managers construct the marketing mix, also called the four Ps, to

accomplish marketing objectives. As shown in Figure 1.2, the marketing mix

decisions are key elements of marketing strategy.

 To a marketing manager, marketing communication is just one part of the marketing

mix, but to a marcom manager, all of these marketing mix elements also send

messages that can sometimes contradict planned messages or even confuse

consumers.

Product

Chapter 1: Strategic Brand Communication

 Some brands are known for their design, which becomes a major point of

differentiation from competitors. When this point of difference is of significant

importance to customers, it also becomes a competitive advantage.

Pricing

 The price a seller sets for his product sends a ‘quality’ or ‘status’ message. The price

is based not only on the cost of making and marketing the product, but also on the

seller’s expected margin of profit, as well as the impact of the price on the brand

image.

 Ultimately, the price of a product is based upon what the market will bear, the

competition, the economic well-being of the consumer, the relative value of the

product, and the consumer’s ability to gauge the value, which is referred to as

price/value proposition.

Place (Distribution)

 Distribution strategy provides mechanisms that make the product easily accessible to

its customers and also handle the exchange of payment. Where and how the brand is

made available also sends a message.

 A common distribution strategy involves the use of intermediaries, such as retailers.

Chapter 1: Strategic Brand Communication

Direct marketing companies distribute their products directly to a consumer without

the use of a reseller. The sale is totally dependent on the effectiveness of catalogs and

direct-response marketing.

Other Factors in the Mix

 Personal selling relies upon face-to-face contact between the marketer and a

prospective customer, rather than contact through the media. It is particularly

important in B2B marketing and high-end retail. In contrast to most advertising,

marketers use personal selling to create immediate sales to shoppers.

 Marketing communication supports sales programs to develop leads, the

identification of potential customers or prospects. Lead generation is a common

objective for trade promotion and advertising.

What is the Added Value of Marcom?

 Added value refers to a strategy or activity that makes the product more useful or

appealing to the consumer as well as distribution partners.

WHAT IS INTEGRATED MARKETING COMMUNICATION?

 Integrated marketing communications (IMC) is the practice of coordinating all

messages from all marketing communication tools, as well as the messages from the

marketing mix decisions. One important IMC goal is to send a consistent message

about the brand.

Chapter 1: Strategic Brand Communication

 Marketing communication is at the center of brand communication and marketing

planning. Those relationships are depicted in Figure 1.3. The problem arises when the

marcom tools are not aligned with other marketing mix communication messages that

deliver brand communication.

Why Focus on Brands?

 Branding is a management function that uses communication to create the intangible

aspects of a brand that make it memorable and meaningful to the consumer. Effective

marketing communication establishes the unique identity by which the brand engages

hearts and minds.

 A brand can be defined as a perception, often imbued with emotion, that results from

experiences with and information about a company, an organization, or a line of

products. Other definitions include identity elements such as the brand name and the

Branding Differentiates Products and Organizations

 Branding also differentiates similar products from one another. Companies make

products but they sell brands. A brand differentiates a product from its competitors

and makes a promise to its customers.

How Does a Brand Acquire a Meaning?

 A brand is more than a name or logo. It is in fact a perception – an identification or

impression that we assign to products we know and use. It is also defined as an

integrated perception that is derived from experiences with and messages about the

brand.

Chapter 1: Strategic Brand Communication

 Meaning-making cues and images are what marketing communication delivers to

brands. This brand meaning is the one thing a brand has that can’t be copied.

Competitors can make a similar product but it’s difficult for them to make the same

brand because brand meaning is built on a collection of personal experiences.

How Does Brand Transformation Work?

 A basic principle of branding is that a brand communication transforms a product into

something more meaningful than the product itself. Brand transformation creates

the difference by enriching the brand meaning through symbolic brand cues. There

are many elements in branding, but for our purposes, we will focus on four: identity,

position and promise, image and personality, and reputation.

Brand Identity

 A critical function of branding is to create a separate brand identity for a product

within a product category. Brand identity cues are generally the brand name and the

symbol used as a logo. The choice of a brand name for new products is tested for

memorability and relevance. The easier it is to recognize, the easier it will be to create

awareness of the brand. Successful brand names have several characteristics:

 Distinctiveness. A common name that is unrelated to a product category ensures

there will be no similar names creating confusion, such as Apple Computers. It

can also be provocative, such as Virgin Airlines.

 Association. Subaru, for example, chose Outback as the name for its rugged

SUV, hoping the name would evoke the adventure of the Australian wilderness.

Chapter 1: Strategic Brand Communication

 Brand identity cues are generally the brand name, but they can also be visual

symbols. A number of elements contribute to the visual identity: logos, trademarks,

characters, and other visual cues such as color and distinctive typefaces.

 While brand names are important, recognition is often based on a distinctive

graphic. A logo is similar to a cattle brand, in that it stands for the product’s source.

A trademark is a legal symbol that indicates ownership. Trademarks are registered

with the government and the company has exclusive use of it, as long as it is used for

that product alone.

 Problems can arise when a brand name dominates a product category, such as

Kleenex and Xerox. In such situations, the brand name becomes a substitute label for

the category label. Some branded products lost the legal right to their names when

they became generic category names.

Brand Position and Promise

 Positioning is a way to identify the location a product or brand occupies in the

consumers’ minds relative to its competitors. Related to brand position is brand

promise. From a consumer viewpoint, the value of a brand lies in the promise it

makes. The brand, through its communication, sets expectations for what a customer

believes will happen when the product is used.

Brand Image and Personality

 A brand image is a mental picture or idea about a brand that contains visual

associations, as well as emotions and past experiences with the brand. These

associations and feelings result primarily from the content of advertising and other

marketing communications.

Chapter 1: Strategic Brand Communication

 Part of the image is brand personality, which humanizes an organization or a brand.

It symbolizes personal qualities of people you many know, such as bold, fun,

studious, geeky, daring, etc. Brands speak to us through their distinctive images and

personalities.

Reputation and Integrity

Brand Value and Equity

 Brand value comes in two forms – the value to a consumer and the value to the

corporation. The first is a result of the experiences a customer has had with a brand.

The second is a financial measure, which is called brand equity.

Consumer Brand Value

 On the customer side, the decision to buy or use a product or affiliate with an

organization is made easier by the familiar face of a known brand. There is less risk

in committing to a known brand, particularly if you have previous experience with it,

you liked it, and it is well promoted.

Brand Equity

 A brand and what it symbolizes can affect how much people are willing to pay for it.

When identical products carry different labels, people will pay more for the

recognizable brand. “The value added is in the brand – how it is imagined, presented,

sold, and sustained,” according to CNN’s Fareed Zakaria.

Chapter 1: Strategic Brand Communication

 To summarize, brand equity is the intangible value of the brand based on the

relationships with its stakeholders, the effectiveness of its identity elements, its

reputation and perceived performance, and its intellectual property, such as product

formulations.

Leveraging Brand Equity

 Brand marketing and communication managers, who we call brand stewards, will

sometimes leverage brand equity through a brand extension, which is the use of an

established brand name on a related line of products. In effect, they will launch new

products with a recognized and respected name. The disadvantage is that the

extension may dilute the meaning of the brand or may even boomerang, if the

extensive performance is not comparable to the original brand.

 Co-branding is a strategy that uses two brand names owned by two separate

companies to create a partnership offering. An example is the brand name Mileage

Plus, which carries the identities of both Visa and United Airlines. The idea is that the

partnership provides customers with value from both brands.

 Through a practice called brand licensing, in effect, a partner company rents the

brand name and transfers some of its brand equity to another product. The most

common example comes from sports teams whose names and logos are licensed to

makers of shirts, caps, mugs, and other memorabilia.

Brand Communication in a Time of Change

Accountability

 Marketing managers are challenged by senior management to prove that their

decisions lead to the most effective marketing strategies. Business results measured in

terms of sales increases, the percentage share of the market that the brand holds, and

return on investment (ROI).

Chapter 1: Strategic Brand Communication

Brand Relationship Strategies

 Relationship building communication programs have strategic implications because

they shift marketing strategy away from focusing on one-time purchasing to

Word-of-Mouth Marketing

 A powerful new force, word-of-mouth communication, is a partner to relationship

programs. Comments from influential friends and family are more believable than

most planned marketing communication messages, such as advertising, which is often

seen by consumers as self-serving.

Global Marketing

 Marketers have moved into global markets. In most countries, markets are composed

of local, regional, international, and global brands. A local brand is one marketed in a

single country. A regional brand is one marketed throughout a region, such as North

America, Europe, or Asia. An international brand is available in a number of

countries in various parts of the world. A global brand is available virtually anywhere

in the world, such as Coke.

Convergence

 “Convergence of business models, convergence of digital, convergence of tools –

everything is changing quite radically the way we do business,” according to the CEO

of Publicis, a global marcom agency. Consumers are empowered and engage in both

sending and receiving messages. Media forms are blurred. Advertising, public

relations, and other marcom areas are blurring their functions, as well as integrating

their functions.

Diversity

Chapter 1: Strategic Brand Communication

End-of-Chapter Support

REVIEW QUESTIONS

1-3. What is the difference between marketing communication and brand

communication?

Marketing communication (marcom) involves the use of a variety of tools and functions,

such as advertising, public relations, sales promotion, direct response events and

sponsorships, point of sale, digital media, and the communication aspects of packaging,

1-4. What is the definition of marketing, and where does marketing communication

fit within the operation of a marketing program?

Marketing is the way a product is designed, tested, produced, branded, packaged, priced,

distributed, and promoted. The American Marketing Association (AMA) defines it as

“the activity, set of institutions, and processes for creating, communicating, delivering,

and exchanging offerings that have value for customers, clients, partners, and society at

large.” Marketing managers manipulate the marketing mix, also called the 4Ps, which

refers to product, price, promotion, and place. A key component of marketing

management is the building of successful brands.

1-5. Outline the general structure of the marketing industry and identify the key

players.

The marketing industry is a complex network of professionals. The four categories of key

players include 1) marketers, 2) marketing partners, such as advertising and public

relations agencies, 3) suppliers and vendors, and 4) distributors and retailers.

Chapter 1: Strategic Brand Communication

The materials and ingredients used in producing the product or managing a nonprofit

agency are obtained from other companies, referred to as suppliers or vendors. The

phrase supply chain is used to refer to this complex network of suppliers whose product

components and ingredients are sold to manufacturers.

1-6. Explain how marketing communication relates to the four key marketing

concepts and to the marketing mix.

The four key marketing concepts highlighted in this chapter are the marketing concept,

exchange, competitive advantage, and added value. To adhere to the marketing concept,

marketers must first determine through research consumer needs and wants. Typically,

some form of marketing communication is used to collect consumer feedback so that

marketers can develop products that respond to those consumer wants and needs that

were identified. Marketing communication is required to teach consumers about a

product’s points of differentiation and competitive advantage. The creation of added

value is the result of a marketing communication activity that presents the product as

more valuable, useful, or appealing to a consumer. Prior to any economic exchange, a

communication exchange must first occur. Also, some type of marketing communication

is needed to bring the buyer and seller together, which creates the opportunity for

customer-company interaction.

1-7. Define integrated marketing communication and explain what integration

contributes to brand.

Integrated marketing communications (IMC) is the practice of coordinating all marketing

communication messages as well as the messages from the marketing mix decisions.

One of the important things that IMC does is send a consistent message about the brand.

Chapter 1: Strategic Brand Communication

IMC is like a musical score that helps the various instruments play together. The song is

the meaning of the brand. It is still evolving, and both professionals and professors are

engaged in defining the field and explaining how it works.

1-8. Explain how brand meaning and brand value are created and how they relate

to brand equity.

Brand meaning evolves through the transformation of a product into something unique

and distinctive and by making a promise that establishes customer expectations of the

product. The impressions created by the brand’s tangible and intangible features come

together as a brand concept. Intangibles are very important because they create the

emotional bonds people have with their favorite brands, are impossible for the

competition to copy, and can lend monetary value and legal protection to the brand’s

unique identity. Brand identity, positioning, image, and personality are also important

contributors to a brand’s meaning.

DISCUSSION QUESTIONS

1-9. Apple is one of the most recognized brands in the world. How did the company

achieve this distinction? What has the company done in its marketing mix in terms of

product, price, distribution, and marketing communication that has created such

tremendous brand equity and loyalty? How have advertising and other forms of

marketing communication aided in building the brand?

Chapter 1: Strategic Brand Communication

a simple and streamlined user experience. This strategy skyrocketed Apple to the

forefront of the smart phone market, making Apple a force to be reckoned with beginning

with their original release of the iPhone in 2007.

Promotion: Apple has done a superior job of creating a brand personality and building

an emotional connection with its customers through marketing communication. Apple’s

advertising has been instrumental in making Apple the iconic brand that it has become.

In 1984, Apple created a commercial for the Macintosh that is now regarded as a

watershed event in the history of the brand. In later years, Apple’s advertisements

established “traits” such as ‘creative’ (for example the “Think Different” campaign in

Distribution Strategy: In the late 1990s and early 2000s, Apple, like other consumer

electronics companies, was dependent on big-box retailers to sell its products. While this

strategy made sure that Apple products were widely available, it gave the company little

control over point-of-sale customer experience as the retailers’ staff was usually not

trained in selling Apple products. To address this problem, Apple launched what it

prefers to call as significant stores. These stores, with amazing architecture, are located

Pricing Strategy: According to Forbes Magazine, Apple uses a “high price, high margin

strategy.” Some feel that the company’s insistence on this strategy is limiting profit

growth, since they clearly could sell more phones at a cheaper price. Clearly, this pricing

strategy sends a message to consumers about the product’s quality and status.

Chapter 1: Strategic Brand Communication

1-10. When identical products carry different labels, people will pay more for the

recognized brand. Explain why that is so.

1-11. List your favorite brands and from that list do the following analyses:

a. Think about the categories where it is important to you to buy your favorite brand.

For which categories does the brand not make a difference? Why is that so?

b. In those categories where you have a favorite brand, what does that brand represent to

you? Is it something that you’ve used and liked? Is it comfortable familiarity – you

know it will be the same every time? Is it a promise – if you use this, something good

will happen? Is it something you have always dreamed about owning? Why are you

loyal to this brand?

TAKE-HOME PROJECTS

1-12. Portfolio Project: Look through the ads in this textbook or in other publications

and find an example of an advertisement that you think adds value to a brand and another

ad that you think does not effectively make the brand valuable to consumers. Compare

the two and explain why you evaluated them as you did. Copy both ads and mount them

and your analysis in your portfolio.

Chapter 1: Strategic Brand Communication

Added value refers to a strategy that makes the product more useful or appealing to the

consumer, as well as distribution partners. Added value is the reason consumers are

willing to pay more for one brand over its competition. Advertising and other marketing

communication not only showcase the product’s value but also may add value by making

the product appear more desirable. This concept should be reflected in (or missing from)

ads reflected selected by students.

1-13. Mini-Case Analysis: Explain how New Pig’s marketing communication helps

support and build the brand image. In what ways do the other elements of the marketing

mix communicate messages about the New Pig brand?

New Pig’s integrated marketing communication strategy used a variety of promotional

tools to send a singular, unified message to its customers about its brand. This company’s

marketing communication strategy added tremendous value by transforming a product

TRACE NORTH AMERICA CASE

Multicultural Millennials

Read the Trace case in the Appendix before coming to class.

1-14. What aspects of the marketing mix are relevant to a campaign to Multicultural

Millennials (ages 18 – 29)?

1-15. Why do you think TRACE would want a campaign directed to Multicultural

Millennials?

1-16. Prepare a one-page statement explaining how the “Hard to Explain, Easy to

Experience” campaign will actually help TRACE sales among Multicultural Millennials.

Chapter 1: Strategic Brand Communication

ADDITIONAL MATERIAL

ASSIGNMENTS

Individual Assignments

1. Have students select one of their favorite brands. It can be either a product or a

service. Then have them consider what sort of image the brand carries in their minds.

How did this image come about, and what was the role of advertising in creating it?

Students should share their answers with the class in 2- to 3-minute presentations.

To enhance their presentations, students can also pull up their organization’s website

to show the class.

2. Have students identify a brand communication campaign that is designed to appeal

to each of the four markets identified in Figure 1.1 of the textbook. Compare and

contrast the marketing mix of each to identify strategic similarities and differences.

How does each attempt to communicate a point of differentiation and/or competitive

advantage? Students should share their findings with the class in 8- to 10-minute

presentations. To enhance their presentations, students can also provide brand

communication images to show the class.

Think-Pair-Share

1. Have students pair off to interview each other regarding a negative experience they

can recall with a specific brand of product or service. Draw upon the principles of

IMC in this chapter to attempt to determine what went wrong. How did it happen?

What contradictory brand messages were conveyed? Was a brand promise violated?

What was the result of this breakdown – did the student remain as a customer with the

company, or was the brand relationship severed? Once the interviews are complete,

each student should draft a brief report outlining their findings.

2. Many marketers have moved into global markets. The communication strategy for

global marketing depends in part upon on whether the brand’s messages are

standardized across all markets or localized to accommodate cultural differences.

Chapter 1: Strategic Brand Communication

OUTSIDE EXAMPLES

1. Choose a small business or non-profit organization in your community to visit.

Gather as many samples of their marketing efforts as possible and analyze them

carefully. Examples could possibly include brochures, print advertisements, direct