Brand Management Transcript- Dec 13

Brand Management Transcript- Dec 13 - Introduction Brand...

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Introduction Brand loyalty, this is something that we haven’t talked about yet. It is something on the pyramid, because if you reach all the other levels of your brand building, that is what you should be focusing on. It is obviously important to a lot of brands in this room because you don’t only want someone to try your brand once, you want them to come back. This is how business for a brand becomes profitable. For example, if you look at the brands in this room, If you are Powerade, you are looking for consumers to drink Powerade, or as many beverages as possible. If you are T-Mobile or Nokia, a lot of us switch carriers or upgrade our phones very frequently, like someone from Hong Kong said that they switch phones every six months, so you want to make sure that someone who wants to upgrade will stay with your brand. If you are in the clothing business, if you are Levi or Gap, it is a question about maximizing what they call share of …, buy as many clothes as possible from your brand. If you are Myspace, you want more people to go on your social networking site than on Facebook or other sites. So clearly, getting repeat purchase is very important. Overview of this Session’s Agenda What we want to talk about today is how to build that sort of brand loyalty. Let me begin by asking if there is a difference between loyalty and repeat purchase? Loyalty should be initiated before purchases. You could have repeat purchases without loyalty. Repeat purchases can happen because you don’t have a choice, whereas loyalty can have an emotional side to it. Repeat purchase can happen without loyalty, it could be because of price incentives, it could be because of switching costs. What you want to do is to create loyalty because you want people like this to feel this way, to tattoo your brand on their biceps. That is a question, how do you build this type of loyalty? Why is loyalty important from a financial point of view, getting an increasing share of purchases and so on? But is there another reason to spend money on building brand loyalty and retention? It is a lot cheaper to retain a customer than to acquire a new one. It costs four times as much to acquire a new customer than to keep an old one. So how do we build loyalty? Any thoughts on that? Build a community around your brand, and there are many websites, Facebook pages, etc. Have loyalty programs for customers. What is interesting, loyalty programs, even though they are called loyalty programs aren’t really loyalty programs, we will talk about that. I would argue that the very first step that we should take is to make sure that our customers are happy because you can have all the loyalty programs you want, you can have a lot of emotional advertising and other programs, but if your product really sucks, people aren’t going to be coming back. So the challenge with customer satisfaction is that you either make your customers really happy, charge them next to nothing, give them a lot of stuff for
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This note was uploaded on 02/09/2012 for the course MKT 303 taught by Professor Rajeevbatra during the Fall '11 term at University of Michigan.

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Brand Management Transcript- Dec 13 - Introduction Brand...

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