ecommerce-06

8/3/2019 ecommerce-06

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Part 6

Market Communications and Branding


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Questions answered in this chapter:

What are the four categories of market

communications?

What is a good brand?

What are the methods be used to build

brands on the Web?

What is the 10-step branding process?


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Integrating Communications and Branding

A firm can use two key levers to motivate consumer

traffic and, ultimately, consumption.

Branding is about consumers perception of the

offeringhow it performs, how it looks, how it

makes one feel, and what messages it sends.

Market communications represent customers

interaction with the brand and, more generally,

mass-marketing approaches.

In the offline world, market communications tend to be

one-way, from the firm to the customer.

In the online world, market communications become much

more interactive (two-way).


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Communications and brands are actually the media

of which the Web is made

Old marketing notions : shelf space equals

market share in retail, or mind share leads to

market share in entertainment.

On the Internet, mental space is market space.

If brands are real estate owned by companies in

the minds of consumers, then communications

and brands on the Web represent real estate

competing to attract the scarcest resource in the

new economy consumer attention.


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What Are The Four Categories Of

Market Communications?

Market communications refers to all the points of

contact that the firm has with its customers.The

communication might be between a company andits current customers, potential customers, or even

former customers that the company would like to

regain. To be effective, firms should send different

messages to each of these audiences.


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The Customer Decision Process and Market Communications

Evolution of Customer Buying Process

Early WebMarket

Communication

Television

ads

General

interest

magazines

Niche

magazines

Collateral

Point-of sale

promotions

Direct

marketing

Product

experience

Buyers clubs

Television

ads

General

interest

magazines

TraditionalMarket

Communication

Source: Forrester Res ear ch, M onitorA nalysis

Consideration

Consideration Preference

Preference Purchase

Purchase Loyalty

LoyaltyAwareness

AwarenessBuying Process

Buttons

Banners

Sponsorships

Banners Microsites

Brochureware

Web site

Daily specials

Sweepstakes

First-time order

incentives

E-mail alerts

Newsletters

It is important to reflect on how the marketing communication process

has changed as one moves from traditional to online communications.

Perhaps the most important shift is from the acquisition mind-set of the

traditional world to the experience, retention, and interactive (two-way)

mind-set of the networked economy.


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Framework forMarketing Communications

DirectDirect PersonalizedPersonalized

Broad

Individualized

Offline Online

CommunicationsMedia

Audience

Focus

Traditional Mass

Marketing

Traditional Mass

Marketing

General

Approaches

General

Approaches

A Framework for Online Marketing Communications

This section describes marketing communications that onlinecompanies use to attract new customers. These marketing strategies

are clustered into four major categories:

1

2

3

4


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The Four Categories of Communications

1. General Online Communications (P187)

Banner ads are box-like, graphical ads displaying

a simple message designed to entice viewers to

click the ad.

BannerAd placement: companies have three

different ways to arrange for other Websites to

display their banner ads. Banner exchange network

Pay a third site to carry ads

Banner advertising network

Measuring BannerAd cost and Effectiveness Trial visit

Impression

Click-through


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Other Web ad formats Pop-up ad

Pop-behind ad

Inter stitial ad

Rich media ads/active ads

Site sponsorships give advertisers a chance to

promote their products, services, or brands in a

more subtle way than by placing banner or pop-up

ads on the sites.

In general, sponsorships are used to build brand images

and develop reputation rather than to generate immediate

sales.


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This ad moves up

and down as the usermoves the scrollbar.


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Pop-behind ad


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Affiliate marketing (P200)

The affiliate firms Web site includes information about a

product that is linked to another firms site that offers the

item for sale.

Benefits forthe affiliate firm

For every visitor who follows a link from the affiliates site to the

sellers site, the affiliate site receives a commission.

The affiliate site also obtains the benefit of the selling sites

brand in exchange for the referral.

Benefits forthe selling firm

Whether or not visitors buy, they are exposed to this selling

firms banner advertising on affiliate firms websites, which

builds awareness about the selling firm.

In addition, as consumers become more familiar with the selling

firm, they may decide to go there directly instead of clicking

through the affiliate firms websites. (Over time, this firm can end

up owning the customer without paying a commission to the

affiliate firm.)


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Viral marketing occurs when awareness about

company-developed products, services, or informationis passed from user to user.

Many media related websites allow viewers to send news

items of interest to friends, which is effective because

marketing messages are sent between friends.

Much as affiliate marketing uses Web sites to spread theword about a company, viral marketing approaches use

individual customers to do the same thing. The number of

customers increases the way a virus multiplies, thus the

name.

Unsolicited e-mail advertising An early form of e-mail advertising applied a typical offline

advertising method is junk e-mail (often called spam)

unsolicited mass e-mail that contain the same advertising

message.

P202


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2. Personalized Online Communications

The manner in which transactions occur on the Web provides e-commerce companies with detailed information on their customers

and gives the opportunity to create one-to-one marketing

relationships.

The Four Categories of Communications (contd_2)

Permission marketing involves customers volunteering information

about their online interests and preferences in exchange for some offeredbenefit.

Opt-in e-mail (P194)

Personalized recommendationsmake specific merchandiserecommendations for each user based on past purchases, site pages

viewed, and survey information that the user has provided.

Personalized advertisements provide a customer with dynamicallyupdated personalized ads.

In addition to making their customers shopping experience more

pleasant, personalization is a key tool for increasing switching costs.


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3. Traditional mass media communications As the online environment is becoming more

competitive, it has become increasingly difficult forWeb

companies to make a marketing splash.

In many cases, offline media is necessary to bring new

customers onto the Internet or, for existing Internet users

to make them aware of the brand.

Online companies increasingly turn to the primary

advertising forum of brick-and-mortar companies:

Television. Many online companies find thattelevision, while expensive, can provide a critical

exposure to large audiences and generate explosive

growth in customer base.

Radio.



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4. Direct communications Sales representatives.When properly managed, the

Web can lead to the increased effectiveness of sales

representatives, rather than making them obsolete.

Direct marketing.With the new information gainedonline, e-commerce companies are able to better target

and customize conventional direct marketing mailings.

Telemarketing. Aim is to increase sales it is not to

strengthen brand awareness or image.


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What Is A Good Brand?

According to the American Marketing Association, a

brand is a name, term, sign, symbol, or design, or a

combination of them intended to identify the goods

and services of one seller or group of sellers and todifferentiate them from those of competition.

A good brand provides positive consumer responses

and benefits both target customers and the firm.


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A Conceptual Model of Brand Equity

Brand equity has a wide variety of definitions in the

academic literature.

According to David Aaker, brand equity is a set of

assets (and liabilities) linked to a brands name andsymbol that add to the value provided by a product or

service to a firm and/or that firms customers.

Similar to Aaker, we divide brand equity into two key

components: Intermediate customer responses, and

The benefits - to both the customer and the firm.


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6

A Conceptual Model of Brand Equity

A good brand...

CUSTOMER BENEFITS

Confidence

Loyalty

Satisfaction

FIRM BENEFITS

Reduce marketing costs

Increased margins Opportunity for brand

extensions

BRAND AWARENESS

Depth

Breadth

BRAND ASSOCIATIONS

Strength

Relevant Consistent

Valence

Uniqueness

Memorable

Distinctive

Wrap-arounds

CoreCore

Product /Product /

ServiceService

Market Communication

provides positive

consumer responses...

and benefits both target

customers and the firm

Source: Kevin Keller, Strategic Brand Management(Saddle River: Prentice-Hall, 1998); David Aaker, BuildingStrong Brands (New York: The Free Press, 1995); Strategic

Market Research Group; Marketspace Analysis.

Refers to the strength of

a brands presence in

the consumers mind.

Refer to the

connections maketo the brand.

A brand has three

components


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Branding Choices

1

3

Brand

Reinforce-ment

Brand

Reinforce-

ment

Broad Vs.

Focused

(Specific

Products /Services)

Broad Vs.Focused

(Specific

Products /Services)

BrandAssociation

Brand

Association

BrandAwareness

BrandAwareness

Firm BenefitsFirm Benefits

Customer

Benefits

Customer

Benefits

Product SalesProduct Sales

Sales LeadsSales Leads

Brand

Creation

BrandC

reation

Product TrialProduct Trial

Store TrafficStore Traffic

What value do youwant to derive from

your on-line presence?

What part of brandequity do you want to

build?

What product / serviceare you offering them?

Value ObjectiveComponent of Brand

EquityProduct ScopeTarget Audience

Broad Vs.

Focused

(SpecificSegments)

Broad Vs.

Focused

(SpecificSegments)

Who do we want totarget?

Exhibit 7-7: Online Branding Choices

Source: Forrester Research, MonitorAnalysis

A firms online branding choices depend

upon its communications objectives

Brand creation: The objective

may be to build a new-to-the-

world brand nameSales leads: The company may

decide that the Internet will be

used to facilitate the sales-lead

processStore traffic: The principalobjective for some sites may be

to increase store traffic

Product trial: The objective is

trial usage of the product

Product sales. The company

can also measure the successof a campaign based upon the

actual increase in product or

service sales

Brand reinforcement: It is

possible that the

communications effort is

focused on reinforcing a brand

image that is already widely

accepted in the marketplace


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A Simple View of The Elements of A Brand

The key elements of a brand, according to

researchers at advertising agency Young & Rubicam,

are differentiation, relevance, and perceived value.(Figure 4-16 on page 198)

Differentiation

Relevance

Perceived value

Unfortunately, brands can lose their value if the

environment in which they have become successfulchanges. This is an important element of branding for

Web-based firms to remember, because the Web is

still evolving and changing at a rapid pace.


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Types of Brands

Pure offline and online brands

Classic offline brands include UPS, Coca-Cola, and Disney,

etc.

New online brands include Amazon, Yahoo, and Priceline,etc.

However, as the Internet expanded, we observed the

crossover of offline brands into the online world, and

the transition of online brands into the offline world. The end result is a blurring of the distinction between

pure offline and pure online brands.


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8

The Movement of Brand

TraditionalBrands

On-lineOff-line

Online Brands

onitorAnalysis

Mix of Promotional Activities

Product

Establishment

YahooYahoo

RaguRagu

YahooM

agazine

Wingspan

bank

Wingspan

bank

SchwabSchwab

EggheadEgghead

Brands such as Yahoo

were established

online but use offline

promotional activities

to grow brand

awarenessBrands such as Yahoo

Internet Life magazine

are traditional brands, but

they are extensions of the

online brandsand thus

a mixture of the twoBrands such as

Egghead.com havecompletely shifted

from an offline brand

to a purely online

brandBrands such as

WingspanBank

were established in

the virtual world but

by a traditional

brand

Brands such as

Schwab have

successfully bridged

the gap between online

and offline activities

Brands such as

Ragu were

established

offline but use

online

promotional

activities to grow

brand awareness

and loyalty


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What Are The Methods Be Used To

Build Brands On The Web? Emotional Branding vs. Rational Branding

Brand Leveraging Strategies

Brand Consolidation Strategies

Paid Search Engine Inclusion and Placement

Web Site Naming Issues

Benefits for the use of existing brands are that

Existing brands are known, so they are less costly todevelop

They provide assurance to the target segment

They provide an integrated online and offline experience

(P199)

(P204)


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What Is The 10-Step Branding Process?

Building an On-Line Brand

1.C

learly define the brand audience2. Understand the customer

3. Identify key leverage points in customer experience

4. Continually monitor competitors

5. Design compelling and complete brand intent

6. Execute with integrity

7. Be consistent over time

8. Establish feedback systems

9. Be opportunistic

10. Invest and be patient

1. Clearly define the brand audience

2. Understand the customer

3. Identify key leverage points in customer experience

4. Continually monitor competitors

5. Design compelling and complete brand intent

6. Execute with integrity7. Be consistent over time

8. Establish feedback systems

9. Be opportunistic

10. Invest and be patient

Integrated

Campaign

Value

Cluster

There are a number of well-known frameworks to build brands.

In this section, we provide a simple, managerially relevant 10-step Branding Process.


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A Case Study About Online Branding

Overview ofAmerican Airlines online branding efforts

First to have a service-oriented website (May 1995)

First to launch an e-mail service of discounted fares, Net

SAAver Fares (March 1996)

First to offer real-time flight information (Spring 1996)

First to offer flight information on competitors (Spring 1996)

First to offer airline reservations online (June 1996)

First to offer paperless upgrade coupons and stickers

(Spring 1997)

First to send e-mail confirmation of itinerary and ticketpurchase (Fall 1997)

First to offer high personalization for consumers (June 1998)

First airline to partner with AOL to create AOL AAdvantage

Rewards Program (Fall 2000)


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WWW.AA.COM

A key to AmericanAirliness success in creating an online

brand has been its ability to differentiate itself from

competitors by consistently being first.


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5

Assessment of Key Branding Elements

Key Elements Rating Rationale Rating Rationale

1. Clearly Define the

Brand Audience

Specifically targets AAdvantage members highly profitable and loyal customers familiar

with travel (and thus more likely to buy ticketsonline)

Targets both high spending business customers, aswell Onepass members, and non Onepass members

2. Understand the

Customer

Constantly anticipates and innovates to meet

the needs of the customer

Tends to be a follower in the industry, late in

launching its website (6/97)

3. Identify Key

Leverage Points in

Customer

Experience

Net SAAvers and new customization programleverage consumers desire for finding cheapfares into transaction by sending out e-mailseach week

Sends C.O.O.L. e-mails similar to Net SAAvers andadded a personalization feature to the site, but lateidentification of this leverage point has result insignificantly lower subscription rates

4. Continually Monitor

Competitors

If a competitor adopted a technology before

American; it was quick to followTends to follow what competitors are doing at a

slower pace, launching copy-cat initiatives manymonths after competitor roll-out

5. Design Compelling

and Complete

Brand Intent

Focus, stream lining, and ease of use of website all convey Americans message ofcustomer needs first

Unclear target segment (business travelers? OnePassmembers?) causes lack of clarity with Brand Intent

6. Execute with

Integrity

Trust fostered in the offline world carries overinto the online world

Trust fostered in the offline world carries over into theonline world, with extensive information for memberson privacy and use of provided information

7. Be Consistent OverTime

Although constantly innovating newtechnologies and features, stays true to

something special online

DifferentU

RLs for different portions of the site do notconvey message of consistency

8. Establish Feedback

Systems

Customer service offered as a service at the topof each page in small letters, but is not labeledas a specific menu item

Very easy to access, prominent feature for obtainingcustomer feedback on the website

9. Be Opportunistic Leader in its industry in innovation and

developmentFollower in the industry

10. Invest and Be

Patient

Invests significantly in technology for the future Has a tendency to wait too long to make changescompetitors make to their sites

On-line Branding Best-in-Class Comparison

American Airlines Continental

CVc= very low = low = moderate = high = very high

CV

CV


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Assessment of Key Brand Attributes

Key Attributes Rating Rationale Rating Rationale

1. Relevant

Up to date flight and gate checkinformation

Personalized information based onAAdvantage profiles

PDA applications with flight information

Offers only information forContinentalairlines, but does offer bookings forrental cars and hotels

Allows travel preferences to be saved inprofiles

2. Distinct

Availability of competitor information

Offers highly personalized experience

First to offer tie in with PDA applications

y Offers extensive online customer service

options

Offer customized services for thebusiness traveler

3. Consistent

Portrays an image of something specialonline, consistent with its image ofoffering something special in the air

No key messages online associatedclosely with the offline campaign

4. Memorable

Provides a unique service others cannotoffer (in terms of personalization)

Net SAAvers is the most well known andeffective e-mail marketing tool

MultipleURLs associated with the siteand lack of online / offline messageassociation fail to create a cohesivelymemorable brand for the consumer

On-line Branding Best-in-Class ComparisonAmerican Airlines Continental

= very low = low = moderate = high = very high


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Application of E-Commerce Strategy

Apply the Market Communication andBrandingto the MarketWatch.com.

Framing the

Market

Opportunity

Business

Model

Customer

Interface

Market

Communication

and Branding

Implementation Metrics


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Example: MarketWatch.com

Overview ofMarketing Communications

General online approaches

MarketWatch.com advertises on major portals

MarketWatch.com is a recommended link on the CBS site

and the sites ofCBS partners MarketWatch.com is the premier provider of business and

financial news forAOLs Personal Finance channel, with

links on the AOL site leading to MarketWatch.com

MarketWatch.com has a content-licensing agreement with

online brokers such as E*Trade In addition to agreements with other parties,

MarketWatch.com offers the majority of its content and

tools for free, encouraging users to explore the site and to

return to it regularly


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Example: MarketWatch.com (contd)

Traditional mass marketing media

MarketWatch.com features its own weekly show CBSMarketWatch Weekend

MarketWatch.com provides content for popularCBS

News programs such as the EarlyShow, CBSEvening News and CBSNewsPath

MarketWatch.com contributes content that is airedthrough the Westwood One radio syndicationcompany across the country (154 stations, including

the top 10 markets in the nation , with a reach of 11.5million unduplicated listeners each week)

MarketWatch.com provides financial content tonewspapers, such as the Daily News Express


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MarketWatch.com Marketing Communications

TraditionalMass Marketing Television

Advertising on CBS Mentions and scrolls during CBS shows CBS Marketwatch Weekend Contributions to CBS NewsPath

Outdoor Advertising Outdoor placards Bus advertisements in target cities

Radio Contributions to Westwood One Radio Network Spots during NFL radio broadcasts Mentions on CBS owned and operated radio stations

Print Limited ads in trade journals

Conferences Participation in online finance, online journalism and

internet-related conferences

General Approaches Advertising on major portals (e.g., Yahoo!, Lycos, Excite,

Alta Vista)

Advertising on CBS site and otherCBS internet partners(e.g. CBS SportsLine, CBS HealthWatch)

Advertisements on targeted sites (e.g. other online financial

sites)

Provision of content and tools to sites (e.g., AOL,

Quicken.com)

Licensing content arrangements

CBS Marketwatch Survivor contest

Free information onsite

Personalized Permission marketing emails sent to groups from opt-in lists

Direct

Offline Online

Individualized

Broad

Communication Needs

AudienceFocus


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1

Assessment of Key Branding Elements forMarketWatch.com

Key Elements Rating Rationale

Clearly Define the Brand Audience Three target groups cover a wide range of the population:

Understand the CustomerUnderstands the different needs of savvy investors versus less sophisticated investors

and provides offerings accordingly

Identify Key Leverage Points inCustomerExperience

Focuses primarily on providing breaking news and analysis, rather than enablinginvestors to make transactions

Has developed a community that shares knowledge and encourages frequent returnsto the site

Continually Monitor CompetitorsContinuously tracks studies on demographics, behavior and brand awareness of its

users versus competition

Design Compelling and CompleteBrand Intent

Message of Get the Story Behind the Numbers captures most of the value offered tousers: relevant and in-depth financial information and analysis; it does not fully capturethe tools and education that the site offers

Execute with Integrity The message of the CBS MarketWatch brand is trustworthy; its credibility is enhanced

by the association with the CBS News brand name and the staff of over90experienced journalists and editors

Be Consistent OverTime Initial branding message was: Your eye on the market; switched to Get the Story

Behind the Numbers in 1999. The new message was designed to appeal to a broaderuser group

Establish Feedback Systems Rigorously tested site and message effectiveness with focus groups half-way through

the new marketing message campaign, at a time when the market was in turmoil;results were highly positive

Be Opportunistic Establishing CBS MarketWatch brand over a number of different media, including web,

TV, radio, print and wireless

Invest and Be Patient Investing a large percentage of the company budget to sales and marketing activities

patiently waiting to become profitable, even with a market that currently demandsprofitability

= Very Low = Low = Moderate = High = Very High


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Assessment of Key Brand Attributes forMarketWatch.com

Key Attrributes Rating Rationale

1. Relevant

Directly addressing the needs of different user groups; for savvyinvestors: providing real-time quotes, in-depth analysis and tools; forfinancial information seekers and users new to financial concepts:providing headline news and analysis as well as education tools

2. DistinctBrand message Get the Story Behind the Numbers is distinct from

competitor messages; it focuses on the unique MarketWatch.com

capability of providing new-to-the-world, relevant, in-depth content

3. Consistent

The initial brand message was Your eye on the market. This changedto Get the Story Behind the Numbers in mid 1999. The intent was toappeal to a wider group of users, shifting the focus toward lesssophisticated investors and people new to financial information

The main offering message of providing quality market analysis hasremained relatively consistent

4. Memorable

The Marketwatch.com brand message is highly memorable

This has been aided by appealing and memorable TV advertisements,which start with the end market result of a news announcement andtrace it back to the unlikely events that actually led to it

As a result, the CBS MarketWatch brand rose 10 points in aidedawareness in one year

MarketWatch.com

= Very Low = Low = Moderate = High = Very High


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Homework

Reading the Summary on page 209

Key Terms (P209 -- P210)

Active ad/Rich media ads, Affiliate marketing,

Banner advertising network, Banner exchangenetwork, Brand leveraging, Click-through, Interstitial

ad, Impression, Opt-in email, Paid placement,

Permission marketing, Pop-behind ad, Pop-up ad,

Rational branding, Trial visit, viral marketing

Cases :

C2. Montana Mountain Biking (P214) :Reauired 2 & 4


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Homework (continued)

Prepare the fourth part of your teams

business plan:

Market

Communications and Branding

1. Marketing Communications

2. 10-step Process3. Assessment of Key Brand Attributes

Documents

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