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Keller_SBM3_IM_05 - Chapter5 Overview ,price .

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Chapter 5 Designing Marketing Programs to Build Brand Equity Overview This chapter explores the contribution of three of the four marketing Ps -- product, price  and place – to customer-based brand equity.  The creation of equity effectively begins  with the design of a product or service that satisfies consumer wants and needs.  Perceived quality, which influences attitude and behavior, reflects consumer assessments  of the relative superiority of a brand on dimensions related to performance, design,  durability and other factors. Perceived value reflects consumer judgments about a brand’s  price-quality relationship. The chapter also discusses some of the new developments in personalized marketing.  Experiential marketing, where the marketer focuses on connecting the consumer to the  brand through a unique experience, is one emerging personalized marketing technique.  Others include one-to-one marketing, where the marketer uses technologies such as the  Internet to target individual consumers with individualized marketing messages; and  permission marketing, where the marketer seeks permission in advance from consumers  to send them appropriate, relevant marketing materials.   Pricing strategy can affect consumer perceptions of a brand’s position in its product  category and of its overall quality. Many firms now employ value pricing, in which a  brand’s price is based on considerations of product quality, product costs, and product  prices that satisfy consumer needs as well as the profit goals of the firm. Another popular  strategy is everyday low pricing, which entails reducing or eliminating discounts and  sales promotions in favor of an everyday fair price.  A brand’s distribution strategy also has an important influence on the creation of  customer-based equity. Channels are of two broad types: direct, which involves selling to  customers by mail, phone, the Internet, or personal visit, and indirect, which involves  selling through intermediaries. The image a retailer has in the minds of consumers and  the actions it takes with respect to stocking and selling products can affect the equity of  the brands it sells. Therefore, it is in a firm’s interest to treat channel members as  customers and assist in their selling efforts. The chapter concludes with a discussion of private labels in Brand Focus 5.0, noting that  they primarily threaten brands that are overpriced, under-supported, or undifferentiated.  24
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It is important not to confuse private labels with generic brands, because private labels  identify the source of the product. The source is usually the chain in which the private 
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