January 26, 2008

Three Questions You Need to Ask About Your Brand - by Keller, Sternthal, and Tybout

Have we established a frame of reference?

  • The frame of reference signals to the customers they goal they can achieve through using the brand
  • The frame of reference may change as the product goes through its lifestyle, and as new competitors enter the market
  • Example: Fed Ex as an overnight delivery service, then as a speed and dependable overnight service, now more focused on tracking capabilities (to compete with email and faxes that are often lost)

Are we leveraging our points of parity?

  • Think through the points of parity your brand needs to have with competitors if it is to be accepted
  • New brands – normally points of parity are thought of new brands
  • Brand extensions – can be dangerous, is your point of differentiation go against the minimum requirements for the consumer to recognize you as a legitimate brand in this business
  • Established brands – over time points of differentiation becomes points of parity

Are the points of difference compelling?

  • Three types of difference:
    1. Brand performance – how it meets the consumers functional needs based on intrinsic properties of the brand, does the product do what it says?
    2. Brand imagery – when choices are based on experience, who uses the brand and under what circumstances?
    3. Consumer insight associations – when imagery and performance is less attractive, show you know the customer


  • Build awareness before position
  • Talk about what customers don’t care about
  • Invest in differences that are easily copied
  • Focus too much on the competition
  • Reposition unless absolutely needed

Must make sure position is internally consistent at any point in time.


“Ladder up” – first round describes concrete attributes, second round how those attributes change the users lifestyle, third round how better lifestyles lead to happiness


“The big idea” – identify the main idea and over time show a variety of attributes that imply the benefit

January 14, 2008

Chapter 2: Learning about Markets, Using Market Knowledge - George Day

Superior ability to learn about markets has become vital


3 Trends explain why

  • Changes in complexity of markets – shorter life cycles, cannot react
  • Exponential growth in amount of market data – realtionship databases
  • Need for share organizational assumptions for strategy development

Core Compentency Laws

    1. It is unattainable by money alone
    2. It takes time to cultivate
    3. It is difficult to imitate
    4. It is capable of multple uses
    5. It is enhanced by repeated use

Market Driven Learning Process


Must strive to understand what is causing the changes


The Learning Organization

  • Is serious about trial-and-error experimentation
  • Needs a “inquiry center” an entity and attitude about how to reconcile the voice of the market
  • Uses informed imitation of competitors by understand why their competitor succeeded and improving upon it

One attribute of a company is its customer focus versus competitor focus


Fear-of-failure syndrom – subverts trial-and-error experimentation


Security blanket reseach studies – studies done after the decision is made


Beaware of incomplete mental models and market amnesia



How to organizationally learn about markets

·        Bring mental models into the open

·        Use information technology to enhance learning

·        Activate sensors at the point of customer contact

·        Facillitate knowledge transfer

·        Value continuity



November 01, 2007

Business Strategy Note

Here are my midterm notes for my Business Strategy class at Kellogg PTMBA program.

Sum up all concepts

Firms may use their resources to shape the competitive game in a way that makes the five forces more attractive.
Value Creation and Capture
Economic Profit = (AP-AC) Q
Where AC always includes opportunity cost.
‘B’ Consumer’s max willingness to pay
Consumer Surplus = ‘B’ – ‘P’  = value the consumer captures
Value Created = ‘B’ – ‘C’ = total value created
Firm Value Captured = ‘P’ – ‘C’
AC curve – Quantity X axis, Average Cost Y axis
Productivity frontier curve – ‘C’ on X axis, ‘B’ on Y axis, 

5 Force Analysis

Rivalry: large number of firms, high inventory costs, high fixed costs, lack of differentiation, slow industry growth, high strategic stakes, diverse competitors, capacity in large increments, lack of switching costs
Threat of Substitutes: are there substitute products?
Barriers to entry: economies of scale, high capital needs, incumbent reputation, switiching costs, learning curve, limited access to distribution, government regualtions, network effects, proprietary technology
Supply Power: few suppliers, few substitues for input, costly to switch, suppliers have many other customers, input is more important for buyers, supplier is able to forward integrate
Buyer Power:  one buyer purchased a large share of my output, buyer earns low profits, buyer purchased few other products, buy has full information, easy to switch, buyer can backwards integrate (produce it themselves)

Resource Based View

TEST1: Is it distinctly superior? Can it generate profits? Greater ‘B’-‘C’ in market where it will be used?
TEST2: Can it be reproduced, moved, or imitated? Truely unique? Legal restrictions? Histroical dependence (brand)? (look for isolating mechanicsm also called ex-post barrier) such as learning curve, firm reputation, switching costs, firm-consumer relationship, network effect
TEST3: Is this firm the best economic use of resource? Is it cospecialized? Transfer cost higher than its value? Otherwise well pay more than its value to try to keep it, Am I able to aquire the resource for less than the expected total value to me?
Appropriable quasi Rent = value of resouce to us – value of resource to next highest bidder, most rent we can capture
Ex-ante limits to competition – anything that prevents the price bid from reaching full value of the resource
It is hard to manage or create resources into existance, if you can do it why can’t anybody?

Game Theory

Main parts: players, actions, payoffs

Compeition vs. cooperation, the effect of commitment to a course of action such as sunk costs


Industry level effects – least profitable in one industry may still be more than best profitable in antoher industry

To determine Nash equlibrium, where no one has incentive to move to another decision, find the dominant or at least the dominated strategies

Cooperation can be hard when:lots of firms, no history of trust, hidden prices, and bad market conditions

July 29, 2007

Contemporary Advertising Chapters 5-9 by William Arens

Part 2: Crafting Marketing and Advertising Strategies

Central route to persuasion - invloves higher involvement with the product or message, focuses on product related information

Peripheral route to persuasion - lower involvement, fun ad, remember the brand ads

Habits - Ads break them, aquire them, or reinforce them

Abraham Maslow - Hierarchy of needs

  • Physiological -example: food
  • Safety - example: breaks on a car
  • Social - example: present for a friend
  • Esteem -example: luxury car
  • Self-actualization -examvple: golf lessons

Rossiter and Percy's Eight Fundamental Purchase and Usage Motives

Negative or informational motives:

  • Problem Removal
  • Problem Avoidance
  • Incomplete Satisfaction
  • Mixed Approach - avoidance
  • Normal Depletion

Positive or transformational motives:

  • Sensory gratification
  • Intellectual Stimulation or mastery
  • Social Approval

Theory of cognative dissonance - holds that people strive justify their behavior by reducing the dissonance between their cognations and reality, - many people read ads about products they've already purchased to satisfy the belief that the purchase was "good"

Marketing segmentation - demographics or psychographics

4 P's of Marketing - Product, Price, Place, Promotion

3 Rs of Marketing - Recruiting new customers, Retaining current, and regaining past customers

Fund Allocation - percentage of sales method or share of market method

Position Strategy - own a word in people's mind that associates with the product example: Levi's owns jeans

Top down marketing - Do a situation analysis, define objectives, create strategy to reach those objectives, determine the marketing tatics

Bottom up Marketing - Choose one tatic, then develop a strategy to support that tatic

5 M's of Media Strategy - Markets, money, media, mechanics, and methodology

Methods for Scheduling media

  • Continuous
  • flighting - periods of no advertising
  • pulsing - low level all year with higher level at specific time
  • Bursting in prime time
  • Roadblock - buying same time on all 3 networks
  • Blinking - flooded for short burst