Brand Equity Marcoms - Essay Example

Speaker's s for Brand Equity MARCOMS Marcoms is a communication agency involved in marketing and Public relations business. For this company, brand equity is crucial because it allows it to create a unique brand image and attract more potential customers. Each customer interprets value according to his or her own trade-offs of a product or service's tangible features (color, texture, speed, power, etc.), and intangible characteristics (brand/company image, comfort, prestige, safety, feelings, etc.). Since these are constantly moving targets, so is equity. Companies must address their "value package" or "value proposition" for each customer and plan accordingly (Crawford 2003), The equity of their brands, products, and services insure the loyalty of the customers they want. Attrition can quickly set in, rendering them vulnerable to competition. "Consumer-based brand equity is defined as the value of a brand signal to consumers." (Swait 1998, p. 7) . For Marcoms, once again, proactive commitment to customers separates successful companies from the rest. Because positive equity is so critically important an element of customer loyalty, operational flexibility and value innovation are especially meaningful here. Earlier, the lack of customer loyalty in the supermarket industry was discussed, with real equity being quite elusive for most chains (see appendix 1). At the heart of Marcoms equity package is providing convenience, quality, a variety of services, for customers who want it and who will pay more to get it. It is a premium service identified as such by customers because it delivers more. The equity pressure for companies like Marcoms is that, as they continue to raise the bar on customer expectations, they must also be able to see over the bar and continue to anticipate customer needs (Boone and Kurtz 2002). There are a lot of parallels between (1) the effect on loyalty of customer self-expression and choice and (2) the old-fashioned idea of romance and courtship. Customers are fickle; romance can be fickle. Boy meets girl. Boy wins girl. Boy loves her but takes her for granted. Choice is largely driven by a customer's relationships with a service, and with the companies that offer them. It's about experience, and levels of trust and commitment, through contact with suppliers. Because, in most industries, choices are so readily available, customers are increasingly less hesitant to change suppliers. When replacement is perceived as more positive than negative, they'll move on. Industries such as banking and managed care have seen this occur (see appendix 2). This must translate to positive relationships and contacts, earning and keeping customer loyalty (Crawford 2003). "This perspective on brand equity focuses on the impact on consumer utility of a brand's signal credibility, rather than on the mere clarity of the provided information" (Swait 1998, p. 7) For Marcoms, the long-term value strategy is built on creating strong relationships with customers and anticipating their requirements. A significant new challenge is emerging with regard to value. Companies must now strategize with respect to both the physical product and the "virtual" product, such as information. Overlaps in physical and virtual product occur in many industries, particularly those where a tangible product, such as an automobile, and an intangible product, such as service advice or computer-based information support, coexist. Emancipated thinking and embracing the "possible shapes of things to come" now includes strategies that go beyond reliance on the company's own resources. Increasingly, companies are seeking strategic partnerships and relationships that bring complementary strengths, provide greater customer value, and result in higher share of customer (Boone and Kurtz 2002). Marcoms can build its brand equity through advertising. Marcoms should create a positive brand image and promotes its main goals and strategies appealing to emotions and mind of consumers. Perceptions and tributes towards Marcoms brand will be based on brand equity. These are the extra, equity -building services enhancements that help distinguish one company from the other. For manufacturers, these could be customizing, faster turn-around, electronic ordering and order status updates, warehousing, and shipping services. For retailers, they could be product demos or free samples, information or help desks, or future visit discount coupons. For services, they could be toll-free numbers, extended service hours, follow-up appreciation calls or visits, or free phone consultation. Companies can use customer service to add value, overcome negative price differential, and negate a competitor's size advantage. It also impacts relationships and lasting impressions, greatly influencing whether companies keep, or lose, customers. Proactive, equity -building customer service is one of the keys to differentiating Nordstrom's from other department stores, L.L. Bean from other clothing and outdoor products catalog operations, MBNA from other credit card issuers, British Airways from other airlines, Home Depot from other home products retailers, and Dell from other computer makers (Kotler and Armstrong 2005). Unique customer service will be the group having heavy customer contact, also has a largely reactive relationship with customers. Customers call in with inquiries or complaints, often on special telephone numbers. Or they call with service requests. Some may even write. Except for the "welcome letter" or welcome call or similar approach that some companies use, customers initiate the contact. With the increasing focus on optimizing customer loyalty and long-term value, the structural transformation of sales, marketing, and customer service is well underway. Through the sharing of expertise and information, managers no longer need to be involved with task control and resolution of short-term issues. Managers can then devote more time in planning and organizing (Boone and Kurtz 2002). The end result is an organization which is flatter and more flexible. Customer databases also afford companies the advantage and flexibility to be selective about their sales, marketing, and operations resource investments. A craft products retailer uses customer purchase history to divide its base into quintiles, according to volume. The data show that the top quintile, its largest purchasers, already has a very high rate of repurchase (Kurnar, 2008). With research, the data also reveal that these customers are giving the retailer a very high percentage of their craft product purchases. So, a loyalty-enhancing program for this first tier would not be a particularly good investment. The second tier of customers spends almost as much on craft products as the first tier; but, unlike the first tier, they are less loyal and more apt to purchase from competitors. In other words, the company has a lower share of customer within the second quintile. So, while sales could profitably be gained from multiple quintiles, the greatest growth opportunity, in absolute dollars, comes from the second tier--not the top shoppers (Kotler and Armstrong 2005). In sum, brand equity is one of the tools which allow companies like Marcoms to increase their added value and create a unique image in minds of consumers. Companies should understand that even with the most thorough customer interface and data generation training, information objectivity is an ongoing issue. It has been found that customers follow their own agenda when communicating with a company staffer. They are frequently more positive or more negative, more open or more closed, then when giving information to a third party (and on a blind basis, when the company is not identified). Being ahead of the curve on strategic choice issues also means in-depth and continuing awareness of customer needs, problems, expectations, and complaints. Tucker cites the example of all-suites hotels, a choice opportunity that has had rather limited success because relatively few travelers needed the extra room (or thought it was worth the cost) and because amenities such as full restaurants or round-the-clock room service wasn't always available from these hotels. Systems allow the organization to learn about the needs, problems, expectations, and complaints of its internal and external customers. They guide the design and/or modification of products and services. They deliver these products and services to the customer. Bibliography Boone, L.E., Kurtz, D.L., 2002, Management, McGraw-Hill, New York. Crawford C. Merle. 2003, New Products Management. Irwin-McGraw Hill. 7th edition. Kotler, Ph., Armstrong, G. 2005, Principles of Marketing. Prentice Hall; 11th edition. Kurnar, V. 2008, Managing Customer for Profit. Wharton School Publishing; 1 edition. Swait, J. 1998, Brand Equity as a Signaling Phenomenon. Journal of Consumer Psychology, 7,, 54. Appendix Brand equity . Brand insistence Read More