 As-Salam-Alaikum-Khawatin-Ukhazrat. Wasim As-San welcomes you to the virtual University of Pakistan. Let us get into lecture number 31 of brand management, MKT 624. I've been talking about channels of distribution over the past few lectures and will like to bring that discussion to an end in a short while by giving you a conclusion of what we have discussed so far. I talked about the importance of the channels of distribution and those strategic considerations which we must take into account before deciding what kinds of channel systems could we should opt for. We have the different choices and options. So therefore strategic inputs are the ones which lead us into deciding what kinds of channels are the best suitable under the circumstances which surround to the one particular company. I also talked about the value which the good channels could build up because it has to be the responsibility of a good channel system that it develop customer value. It offers the company good profitability and it has a very good outreach and naturally if a system has a good outreach it will offer the company the good sales revenue and therefore a good level of profitability. The system has to be cost efficient and customer effective. The meaning it must not be the very expensive at the same time it must be the one which serves the customers the way they want to be served. So giving you a conclusion of the channel systems, let me rephrase the whole thing like this, that a business may have a very high-quality product or a set of services, but unless it is successful in delivering those products and services to the target market very efficiently and effectively it will not succeed at the game of marketing. Customers could have preferences for the products and services in view of their the benefits and they also have preferences for the place of buying those products. They certainly have the preference for the place of purchase and that is something companies can have got to be very sensitive about and must go for those systems which can ensure that. Businesses on the other hand have their own priorities. They have the preferences to deliver efficiently and effectively and at the same time they like to build image of the product they are selling. So in other words, unless there is an equilibrium between the requirements of the customers and the requirements of businesses a channel system is not going to be a highly optimal system. In other words, in order for a system to be optimal and very effective and equilibrium between customers requirements and businesses requirements is a must. Let us take a look at this with the help of a graphic illustration. As you can see from this illustration we have the customers requirements on the left hand side and the business requirements on the right hand side. Take a good look at these circles on the customer side. One shows their preference for products and services in view of the benefits because they must enjoy the benefits and that is what they buy those products for. The other thing which is very visible from this illustration is that the customers certainly have a preference for the point of purchase. It is their decision to go to a certain place which they like and it is the responsibility of the company or for that matter the channel system to make sure that the products or services of the company are available there. Take a look at the right hand side of this illustration and you will see it relates to the businesses. The businesses have their requirements to build the image and they cannot build the image of the product unless they make sure that the product is available everywhere. Quality is a given. Quality has been produced. Now we are talking about the channels meaning the phases through which the manufactured product is passing through in order to get into the final hands of the consumers. So image building is a function of not only the quality which is produced in the factories but also the quality of service which the companies offer to their customers and consumers in order for the products to get into their respective hands. And the other thing which I mean another preference of the businesses is that they have got to be very efficient in terms of costing and they also have to be very effective in terms of the outreach. So we can summarize this thing further by saying that depending on the nature of the product the outreach desired and a few other strategic goals companies must decide whether they would like to go for a direct system of channels or an indirect system of channels. So in other words these are the few factors which must be considered very carefully before deciding how and why we should be better off with one given system of channels. Market experience of the major players in this area is also a very good guide and I pointed out this thing while I just started talking about the channels and the importance of channels that whatever is in fashion in the marketplace has got to be considered because if all the major players are following a certain pattern there's got to be a logic and a rationale to that practice. And this is not to say that we must follow the major players all the time. What I'm saying is that we must look into the leads which we might get in terms of improving our systems because we might observe a few things here and there that offer us opportunities for improvement. I mean the kind of things which are not being followed by the major players only because things are working for them very well. And if you think that by becoming a little ingenious or creative for that matter you can bring about improvements which will lead to cost efficiency and customer effectiveness. The two strategic things we must never forget then we must go for those improvements meaning we should think in terms of bringing certain changes. In other further words we can say that we should go for a mixture of different systems or different methods which we think will fit very well into our strategic framework because every company is surrounded by its own circumstances. Every company has its own situation. And what is working for one company may not work as well for another company. So instead of following somebody else in a blind manner one should first look into the considerations which are very strategic in nature and then decide for the kind of systems that one must have. As a final statement toward the channel's system I can summarize the whole thing like this that generally it is a mixture of different systems that companies generally employ and it is a mix of those systems which really optimize the channel and therefore leverage your brand. The systems you opt for have to be the one which must leverage the brand. If the brand stands leveraged it automatically means that you have a very good coverage of the market and if you have good coverage you have a good share of the market and if you have good share you have good sales revenues and good level of profitability. So much for the channels and I hope that we all are very clear about the kind of systems that we should be working for once we get into the practical field. Another important area which I would like to touch upon here is what you might have heard about co-branding. Now co-branding is something which can be discussed in the context of the brand architecture because it certainly has overtones which belong to the architectural side of branding and the portfolios and so on and so forth. But the reason I have chosen to talk about co-branding here while I am just about concluding the discussion on the channels systems is that co-branding generally takes place in order to exert control on the channel. Two brands join hands and they operate within the same marketing space. How they operate within the same marketing space? I am just going to talk about that. It can take so many different shapes and forms. One of the ways which is very common with the foreco branding all over the world is that two brands bundle themselves and they bundle themselves by way of coining a new brand name in a way that the new brand name manifests the strengths of the two companies which are already known in the marketplace. How this branding starts is that one of the brands is not very strong and the brand is not very strong only because it cannot exert control on the channel. And it talks with another brand which is very strong in terms of its channel systems. Let us try to explain this with the help of an example. There is a company which specializes in selling packaged yogurt and there is a company that sells ice cream. Both companies are doing very well in their particular relevant segments. The yogurt company is selling a lot of yogurt and the ice cream company is reaching its customers very well and it offers a lot of customer value. It makes the good profitability so on and so forth. But the yogurt company is not all that strong in so many different channels. It is strong in one particular channel. It is seeking to get into a chain of restaurants which happens to be a channel in itself and it seeks to get into that chain of restaurants by offering a new product and that product is ice cream yogurt. Basically being a yogurt company it has the expertise to start making ice cream yogurt and it starts talking with the ice cream company which is selling its ice cream through that particular chain of restaurants. Convincing that company to join hands and in the process creating a new brand name which highlights the ice cream company as well as the yogurt company. The ice cream company is selling its brand by the name of high cream. It is a supposition and the yogurt company is selling its brand by the name of novelty. Again as a matter of supposition. The two decide to create a new brand by the name of novel cream and start selling that brand through that chain of restaurants. Why that chain of restaurants accepts the new brand and the new product? Because in the first place it is convinced of the brand product relationship. That is what we have learned and it also is convinced of the marketing promise of the company that sells the ice cream and the company that has been selling ice cream and is still selling ice cream to that particular chain. On its own the yogurt company could not be successful in getting into that chain but with the help of this ice cream company it has succeeded to get in there. So now it starts exerting some level of control and power in terms of the channel. It is a pairing of brands. It is a contraction of names and it is sharing of profits. It may not be as attractive in terms of customer value and profitability in relation to one particular brand as it is in case of co-branding because it is two companies that have joined hands. It is two brands that have joined hands. So it certainly has an element of complexity and that complexity has to be handled by people like you meaning the brand managers. But then the fact remains the brand has to capitalize on the channel and one company which is weak in that respect seeks the help of another company and that company thinking that it may not be in a position to introduce this kind of a product which the yogurt company is offering to introduce because it requires a decent level of investment to introduce the product investment in terms of operation, investment in terms of human resource and logistics and so on and so forth and therefore it also thinks to itself it may not be a bad idea in the name of pragmatism that we join hands and introduce something by the name of novelty cream. So this is one example of co-branding and this kind of a co-branding is known co-branding by bundling, where you bundle two products and create the one name by contracting the names of two brands in a way that people can think to themselves immediately, I mean the customers can think to themselves immediately that this looks like a product introduced by these two different companies. Well you highlight the names of your respective companies in one way or the other so that your customers and consumers are going to end up knowing the background of the one or the ones who have introduced the brand. The other form of co-branding is what they call co-branding by ingredient and to give you a classic example of co-branding by ingredient I would like to go back to so many different books which all give this example and that is a name which is very well known to you people who are so much into computers, Intel. Take a look at almost any computer it says Intel Insight. So that is the one brand which has gone into another brand and is supporting the overall product, I mean the bigger product which you are buying and which you call a computer system. You can take a look at a few consumer items and they will recall that there are consumer item companies in particular the food companies that get into this kind of practice. There is a brand of the one food item unless not name it and it carries the names of two companies and it also carries the names of two brands. Here we are not talking about a contraction of two different names but we are talking of two different brands like a computer says the one brand name it is and the other brand which it carries inside of it. So by the same token there is a tea brand for example and it carries the inside of it maybe powdered milk and they are promoting their two brands collectively or in a cooperative way this is another example of co-branding. Co-branding also takes on another form and that is distribution. The two brands could be distributed by one company. Now when two brands are distributed by one company it automatically means that they both give each other strength they both leverage each other, they do not threat each other because if that is the case the two brands will never join hands. Co-branding also takes place in terms of using one channel of distribution for promotion. Take the example of travel agents that promote airlines along with hotels. They offer you so many different packages. Go to this country, go to that country, go to the northern part of the country and they offer you tickets, hotels, accommodation and all the services. So the co-branding in this kind of scenario that takes place not only between two brands it may take place among the more than two. It is the airline or maybe it is one of the transportation companies it could be hotels and it also is those companies that offer ground services. On a vacation you have to surface a lot of area. So the ground transportation companies also come into the picture. There are so many different ways and means to the way by co-branding can take place. Another example before I am done with this concept is the loyalty programs of one particular brand being promoted with the help of another brand. For example a credit card which basically is a financial product with the financial consumer product with the buy banks promoting another company's loyalty program. You use this particular credit card and in return for a higher level of use you accumulate so many points. Just one example and against those points you can go to the gas stations meaning petrol pumps and the gasoline there. So companies could get into partnerships and alliances. The partnerships not really in terms of sharing money and buying each other's assets but working partnerships and these are the kind of the brand the joint ventures where two companies cooperate with each other so that their two brands could be promoted at the same time at the same time by exerting control over the channel. So this is kind of a marketing effort. A collaborative marketing effort which supports the brand more so by way of the channel systems and less so by other tools. And that is why I chose to talk about co-branding in relation to the channel systems. So much for the co-branding and the channel system and this brings us to the completion of one more important step within the brand management strategic process and we now move on to another step which is equally important and in a way it is going to be much more important for you guys because this is one area which you are going to deal with immediately upon arrival into the practical field and that is the area of communication. What communication is all about? What are the different elements of communication and what are the strategic considerations which we must take into account before deciding the tools that we undertake to go for those communications is going to be the area or the topic which I am going to cover in this and in the following few lectures. And I will repeat that this is going to be the area which you are going to be dealing with immediately upon your stepping into the practical field because this deals with advertising, it deals with promotions and it deals with all other tools of communication which you use in order to promote your brand. It goes without saying that the communication in present-day world is of extremely high importance. The fact of the matter is that without a certain level of communication that your product just cannot succeed in the marketplace. This may sound like an oversimplified kind of a statement but that is a fact. No matter however high is the quality of your product and however effective is the system of distribution the optimal level of success which you really want in relation to the brand picture, the brand promise and the brand vision meaning in relation to all the strategic goals that you cannot achieve the right level of marketing success. So communication from that point of view is very important and the importance cannot be overemphasized. Let's put it that way. And without an effective communication system there is no way that we really can achieve all the goals that we envisage as part of the brand vision. I am repeating this thing in light of the importance the concept carries. An effective program is designed to make meaning an effective communication program is designed by people like you to make your product known the meaning to create awareness about the product. An effective program is designed in order to remind the target market of that particular brand. An effective program is designed not only to remind and reinforce the image of the brand but also to make sure that your customers within the target market do take action and go for the desired purchase. Effective communication programs are designed in order to make sure that the people retain in their minds the image of your brand, the benefits that it offers and therefore they buy your brand over and over again. So this is what communication generally does in very simple words. What else communication does is that it brings positioning of the brand to life. It really animates the brand. It gives life to positioning. And you will recall from your learning about positioning that you cannot make a home in the minds of the consumers unless the position of the brand meaning the intended position of the brand is well communicated. Unless you communicate the position of the brand there is just no way that it is going to make a home in consumers minds. So it becomes very important. A well positioned product. I will state it like this that the well positioned product that offers a very good customer value and that also is subject to a very good system of the channel management where they just cannot succeed in the marketplace if it is not supported by a good level of communication. And it is that good level of communication which brings to life with all the elements of the marketing mix. So in other words if a company thinks to itself that we have such a beautiful product which is full of life and it is full of quality and it is being distributed by such a wonderful system that there is no way that the product is going to fail in the marketplace. Well the product may not fail. But the product at the same time may not succeed to the point where you would like it to succeed. The meaning an absolute compatibility and an absolute match with the brand vision. The brand has got to be as successful as you envisaged in the brand vision. Well if your vision is like a fulfillment of the certain level of the sales revenues and profitability which you can attain just by offering a very good customer value with the support of a good channel system that is something else but I doubt it. I don't think you will stop there or you should stop there. You have to have a vision which fully exploits the complete properties of the brand and fully exploits its potential and offers value to the customers not only in terms of the benefits I mean the physical benefits but also it should develop certain emotional values and emotional relationships with the target market in a way that they buy your product over and over again and that is the role which is played very effectively by communication. Communication has got to be very effective. How do we go for effective communication? What are the elements and what are these strategic considerations? Well we should be talking about all those step by step and face by face. Having said all that I can say that successful communication stems from the four strategic areas and these are the four areas which basically are the basis of all the marketing decisions. Number one being the corporate vision. Number two being brand vision and third being brand picture and brand positioning. Not only that the good communication strategy stems from these four strategic areas but once a communication strategy takes shape and it is implemented it also reinforces and fortifies these particular areas. So in other words they complement each other. Having talked about all this I would now like to tell you about all the tools which you are going to have at your disposal when you develop a communication strategy. Now these are the tools which you have already gone through in terms of learning when you did your basic marketing course but for the sake of consistency and for the sake of developing the right kinds of relationships between these tools and the strategic considerations that you are going to have into account to develop an effective communication strategy I must talk about those and those are advertising number two promotions. Promotions are divided into two sub areas. The one is the trade promotions and the other is consumer promotions. I think we all know that we carry out promotions at the level of the channel members rather to induce them into doing a few good things for the company which I will talk about later and the consumer promotions are all about actuating consumers to buy your brand over and over again and also in bigger quantities so that they get so much hooked onto your brand that they do not forget buying it the next time. The third tool of advertising is event marketing and sponsorships. This is something which is gaining a lot of popularity nowadays. You watch so many different television channels and every now and then here and there there is a huge program going on in relation to promotion of one particular brand but the vehicle is something else. The vehicle may be in the shape of celebrities and so on and so forth that bring to your brand a lot of promotional mileage. The fourth tool of communications is direct marketing. Direct marketing is something which I talked about as part of the channels area also. Direct marketing takes on communication overtones because it takes place with the help of a telephone with the help of a fax system and with the help of electronic systems with the meaning e-marketing. I did talk about that in relation to the channels and I will be talking about direct marketing again in the context of communications because this does carry with itself a lot of communication value and communication and selling directly take place at the same time. Another tool of communications is internal communications like you have newsletters which you distribute first of all among all the members of the organization and among the members of your sister organizations among all those who are associated with you. For example with the company that has gone into a brand joint venture in terms of co-branding you would like to send your communication to that company in order to make them aware of all the measures that you intend to take in relation to your brand and the brand communication. So these are some of the tools which you are going to have at your disposal while developing communication strategies. Advertising and promotions of course it goes without saying that happen to be two of the most important tools that any of the marketing persons have at their disposal. These are the most widely used tools and these are the most popular tools and these are the most effective tools. The only thing is that these also happen to be expensive tools. So it is about there being expensive that you have to make the right decisions about a mix of different tools which you should be employing toward your strategy and we shall be talking about that every now and then and like I pointed out a couple of times in my lectures wait until I undertake the last one or two lectures in which I shall be developing a brand plan and talking about how you develop these strategies and the statements of all the strategies which you should have in place and which lead to the technical and execution details so wait until that time. Back to advertising and promotions the two of the most effective but nevertheless expensive tools of communications. Advertising and promotions are two terminologies which at times are used interchangeably. Before I proceed further with the lecture let me clarify that advertising and promotions are two different things and therefore cannot be talked about interchangeably. The one just cannot be taken for the other. Advertising is an all paid for persuasive communication in the main media of television, press, radio and cinema. This is what we generally mean by advertising it is known as something above the line when you are talking with the ad agencies whether you will be talking in this kind of terminology that I want to go for the following in terms of above the line and I want to go for the following in relation to below the line below the line is what we call promotions and a promotion covers activities which are basically designed to increase sales by offering an inducement such as extra product free gifts, sampling and the competitions. The basic purpose of promotions is to increase the usage of the product in the short term with a long term objective that whatever you undertake for the short term is going to have its impact for the long term. Now whether that has an impact for the long term or not remains to be seen and there is a lot of debate on promotions nowadays whether the companies should carry out promotions or not or whether the companies should carry out promotions to the level and degree those are being carried out by so many companies all over the world there is a heated debate nowadays there are pros and cons which I should be talking about a little later promotions like I told you earlier can be divided into two kinds one is trade promotions and the other is consumer promotions trade promos call it to see in short terminology are aimed at the trade and ties them into stocking more so that they give up a brand more space and better space to sell more consumer promos are designed to encourage consumers into buying more and that is why we go for things like 10% extra or 20% extra we go for bigger packs we get into promotions like buy two get one free or even buy one and get one free these kind of promotions have got to be planned in advance of their execution because they may not be very simple things they may look kind of simple but there is a lot of complexity underneath the total effort just take a look at the package of detergent which says 15% more and you will understand the complexity which is there in terms of procurement and the total supply chain you have to place order from your suppliers in terms of getting a pack which is different in size which is a little different in terms of graphics it is going to call for so many different changes at the level of the printing then cutting and so on and so forth so what I am saying is that the implications these promotions entail they have got to be taken into account and for that matter you have got to have a decent level of lead time which is just about not only sufficient but which is adequate for you to plan all the promotions and then are in a position to execute those in a timely and effective manner with the help of advertising what you basically do is you create a pull you pull the consumers toward the brand which is sitting at the shelves in the supermarkets so advertising basically pulls the consumer and with the help of promotions you create a push you push the consumer toward the product and as the conventional wisdom goes it is the balance between this which does the trick for the marketing people so in other words if you create a pull the members of the channel may not be very supportive because they have their own with a point of view and they think if the companies are spending such a lot of money on communications in creating that pull they should also go for certain kinds of promotions so that the element of push is also there now do not forget that that element of push consists of two things the consumer promotions and the trade promotions so whereas you are pushing the consumer toward the product the member of the channel if you also are carrying out certain trade promotions will feel equally actuated and motivated to push that product toward the consumer and if you are giving like buy one and get one free or get this 10% extra for a limited period they are not encouraging the channel members on their part they may not feel very enthusiastic in terms of giving you the right space in the market and the amount of space which a brand needs because when you get into these kind of communications again you see as the experience or the empirical evidence goes your sales increase and the increase in sales is going to be undermined if channels that are not really receptive and retailers in particular are not in a mood to offer you the right amount of space that you require in the light of those communications we shall talk about the pros and cons of promotions let us now summarize what I have talked about so far I think our understanding about the basic objective of communications is very clear and that is number one to create awareness and number two is to maintain that awareness and number three is to actuate your target market to take an action meaning to go and buy your brand these objectives could be further elaborated like the following the brand awareness is all about the information which you provide your customers and your consumers with they have got to have complete knowledge of the brand and the product meaning the benefits the product carries and the value it is going to develop and generate for the consumers these are the kind of things which you talk about while creating awareness reinforcing the message means that you've got to make sure that there is a certain level of retention of the message which you have created and which you are communicating and transmitting to the target market in the minds of the consumers because it is this retention which is going to lead to the action which your consumers are going to take to buy the brand this is something which you have got to picture in the minds of the consumers and it also fortifies that picture in their brand if they retain the message so that is why you talk about these things over and over again elaborating on stimulating the action whether you have to motivate your target customers into buying you see there is a great chance that the level of awareness is very high for the consumers is also very strong yet there is something which is preventing your target market to go for the action and buy the product it does happen in so many different cases and I would like to explain this thing this phenomenon with the help of examples and then you will realize how important it is not only to create awareness but also to do something at a certain point of communication process which keeps your customers and consumers motivated into buying your product because that is the name of the game if they do not buy just awareness with the maintenance of it and retention of the information into their minds is of no use different experts talk about the concept of communication broken into so many different phases or so many different steps in different ways but there is a consensus on the one thing and that is that the beginning of the process or the point of departure for this process has got to be awareness and understanding the objectives that I talked about in terms of creating awareness and maintaining awareness and actuating the consumer to buy the product could be related to different steps which are involved or which form the communication process one of the authors and I am referring to the textbook as a matter of fact you must refer to your degree of requesting and insisting that before coming to the classroom for your lecture you must go through the handouts very, very carefully and very assiduously getting back to the author of the book or the concept that talks about is also known as author it is u t h o r a stands for awareness u for understanding t for trial the meaning even if there is awareness and understanding and part of the consumer the consumer must go for a trial because once the consumer has tried your product and if you believe in your product that it is very well positioned and it is fulfilling the need in a beautiful way then there is no way that customer will turn away from your product so that is the significance of the trial the next letter h stands for happiness the meaning that once the consumer has tried the product the consumer should feel so much happy about it that he should go for the product over and over again the next letter is o o stands for the only one what does that mean? well it may sound very simple but basically it refers to the positioning the brand should be able to make such a beautiful home into the minds of the consumers that they only think about your brand that is what is meant by the only one and the last letter of the concept author or the process author is r and r stands for referral the consumers who are buying a brand that they should be so much satisfied and loyal that they should be referring it to others and you know why people refer the brands to others we did do a lot of learning in relation to this concept in the very formative lectures there are other authors or theorists who talk about a similar concept in different ways and for the sake of comparison I would like to draw your attention toward the illustration which shows us the two models the model one is I have just talked about and the model two is awareness comprehension intention and action now it is very clear when we look at this illustration that awareness is step number one and both the models and understanding and comprehension being the same thing is step number two in both the models and in model number two we have intention which I would say is the combination of the trial and happiness in the model one because if the consumer has tried your brand and he is feeling happy about it and he really thinks that this is the only one he should be buying all the time he certainly has intention to buy it every time he makes the decision to buy that kind of a product so the intention is a combination of those three steps of model number one the last step of model number two is action which of course is the last step in any given the process of purchasing much less the communication because it is at that point that you go and buy so you have to be very clear about these steps which are going to form the process of communication and in order to make it very clear once again in your minds I would like to talk about awareness and comprehension as being the basic denominators of the strategic process of the communication and to summarize the whole thing all over again unless there is awareness and comprehension there is no way that the specific steps of the concept are going to be followed they will not be fulfilled and hence the strategic framework in relation to communication will remain kind of lopsided and unfulfilled I would like to summarize by saying that I have talked about what communication is the importance of communication in the context of the elements of communication are different tools of communication and the essence of communication in terms of the communication process by way of talking about the concept known as author once you understand the essence of the concept the next question which must flash into your mind is what is it that this process does with the consumer and that is going to be the topic of discussion in the next lecture I am going to explain to you in very brief words that the process evokes the certain responses in consumers minds and those responses could be explained with the help of certain effects that take place again in the mind of the consumer and that is going to be the discussion of the next topic and based on that we should be talking about strategies and how to fit different tools which sound so simple into the strategic framework meaning where advertising should come in and where should promotion go and where event marketing comes in so on and so forth I look forward to seeing you talking with you in the next lecture Allah Hafiz until then