Designing Marketing Programs to Build Brand Equity
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
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.