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Thoughts Reflexion and Analysis for the Indian Market May 2016 Understanding Brand Preference to build a better marketing strategy Foreword There has been a long standing interest from marketers to understand how consumers form their preferences toward a specific brand. Brand preference is closely related to brand choice that can facilitate consumer decision making and activate brand purchase. Knowing the pattern of consumer preferences across the population is a critical input for designing and developing innovative marketing strategies. It also uncovers the heterogeneity of consumer choices leading to efficient market segmentation strategies. However, forecasting consumer’s preferences between brands is not an easy task. Most of the early models focused on brand attributes in preference construction. Thus the evolving marketing strategies focus on analysing and communicating information about product attributes. Although these cognitive responses derived from beliefs about brand attributes are important in building preferences, there are other emotional responses, social influences that can influence brand preferences. It is demonstrated that consumers can have an already established preference and refer to the brand attributes that confirm their preferences. In addition, this traditional cognitive view that deemed consumer as rational decision making had been shifted to the experiential view focuses on the emotional, cognitive, symbolic responses of consumption. This shift echoed the changes that companies have moved from focusing on attributes and features toward creating experiences to their consumers. Brands are no longer bundles of functional characteristic but are means of providing experiences. Moreover, these experiences were hypothesised to be an important driver in building brand preferences. The influence of brand preference on brand image transfer The marketer’s principal objective is to reach his/her target group and make more than a single sale. However, consumers almost always approach the marketplace with a well-established set of tastes and preferences. This makes it difficult for new products to position between the already flooded market demands. This challenge is enhanced by traditional marketing communication activities such as advertising and sales promotion, which are faced with the challenges of reaching increasingly fragmented consumer markets and cutting through an overload of messages aimed at consumers, which creates media clutter. “Marketers have been spending more and more to try to get their message out, only to find their pitches drowned out in a sea of noise generated by countless other marketers trying to do the same thing” (Freedman, 2005). Sponsorship is viewed as a means of avoiding this clutter by enabling sponsors to identify and target well-defined audiences in terms of demographics and lifestyles. In order for the effect of sponsorship to be maximized, Keller (2003) emphasizes that it is important to select the right type of events or endorsers to match the brand. Literature study suggests that sponsorship functions like celebrity endorser advertising. Companies hire famous athletes and actors in hopes that celebrities’ fans will also become ‘fans’ of their products or services. According to McCracken (1989) endorsers can leverage their own popularity to create positive associations for brands in the minds of consumers. Brand managers are hoping to transfer this creation of associations to their own product. When a brand is identified as linked to an endorser or event, consumers may infer that some of the particular associations or feelings that characterize the celebrity or event may also characterize the brand. Research of Becker-Olsen & Simmons (2006) showed that high-fit sponsorships (sponsor partner is perceived as congruent with sponsored event) can increase brand value, whereas low-fit (sponsor partner is perceived as incongruent with sponsored event) can dilute brand value. These findings suggest that the link between brand and event influence the transfer of image beliefs, and that the perception of congruent sponsorship is the result of an endorser process in which consumers reinforce, or not, brand image beliefs of a product. Influencing Brand Preference Brand preference is built by listening to consumers and addressing both their immediate and long-term needs. With those insights now available, retail marketers can surpass the old goal of delivering the right message at the right time through preferred channels. Now, they can leverage insights to inform and inspire consumer action. Retail marketers and consumers are on a new journey together; the goal is to make it a mutually profitable trip. Understanding is the first step in engaging consumers, but it alone doesn't build brand preference. Connecting with consumers on a personal level and helping them successfully address a need is the root driver of brand preference which, in turn, presents brands with the opportunity to influence shoppers’ decisions and actions. To succeed, retailers need to understand that influencing a shopper's brand preference is a three-legged stool: understand the consumer, decipher intent and enable the purchase journey. Today's consumer is in complete control of their purchase journey. Based on their needs and preferences, they define what constitutes a meaningful brand experience and determine if a brand is trustworthy. This self-directed approach has forever changed the rules of brand engagement. Retailers "know" their shoppers by building deep, data-rich customer profiles of behavior patterns, preferences and needs. These unified customer profiles drive every aspect of a brand's marketing strategy; it's the decoder ring to success. Successful brands use these data-rich customer profiles to drive personalization and omni-channel engagement campaigns. Personalization means more than using the shopper's name. It means leveraging behavioral data to mirror the shopper's tone and preferred channel and type of interaction. Coupled with omni-channel campaigns, consumers stay engaged for longer periods of time with brands that focus their interaction strategies on consumers’ intent rather than channel. That means starting and driving engagement across all channels, not just email. To keep a meaningful conversation going, it's critical to understand the next step in consumers’ purchase journeys. Without the ability to accurately decipher intent, delivering the right message at the right time on the right device to the right person becomes a guessing game. At every step in the purchase journey, consumers want to accomplish specific objectives — e.g., identify potential vendors, understand the pros and cons of products, find out what their peers think, etc. A brand that can capture and decipher intent has a competitive advantage in enabling shoppers to more quickly achieve their objective. The more accurately and consistently a brand identifies and responds to intent, the greater the trust the consumer places in that brand. How can brands decipher intent? By linking predictive analytics and a consumer's upto-the-minute universal behavior data variables with rules-based campaigns. Predictive analytics determine the best degree of fit between a shopper and meta-level purchase paths based on past customer behaviors and their outcomes. By linking the "best fit" path with behavior-based data variables, retailers can spot intent and define campaign rules that effectively engage shoppers in the right next step. The key is to gain the ability to intelligently interpret universal behavior — i.e., a holistic understanding of the consumer based on all internal and external data sources, across all channels and kept current in real time. Consumers are always looking for information, how to connect with like-minded peers, and advice on how to solve a problem when something goes wrong. They expect brands to listen to them regardless of channel and do the heavy lifting to help them address a need. Shopper enablement is the most powerful tool in a brand's marketing arsenal. It connects brand actions directly with the results consumers are trying to achieve. It turns engagement into a competitive advantage by delivering the right interaction and content at the right time to the shopper through the best channels. Armed with data-rich profiles, retailers are engaging shoppers with personalized content, offers and campaigns that are contextually relevant and timely. Leading brands know there's a strong correlation between how effectively they help consumers and building shopper preference for that brand. Helping is the new selling. The success of this correlation relies on knowing how to decipher consumer intent accurately. Furthermore, the three key capabilities for deciphering intent and enabling shoppers are a 360-degree unified customer database, customer intelligence analytics and sophisticated behavioral targeting. When not used together, they can create a disconnected experience that does more harm than good. When used in concert, they can forge a brand experience that makes a lasting — and highly profitable — impression. Today's consumers are in control. They define a meaningful brand experience according to their needs and preferences, and then decide if a brand is trustworthy. If retail marketers want to make the cut, they need to recognize that this empowerment has forever changed the rules of brand engagement. Conclusion By understanding how brands are consumed as symbols of identities, marketing and advertising companies must ensure they understand the main attributes that constitute their target audiences’ self-concepts to develop distinctive and attractive brands that match those same traits. To ensure that a brand is preferred in untapped markets, marketers must develop brand images closely matching the self-perceptions of potential consumers, and should design advertising messages to target their selfconcepts. Additionally, campaigns focused on attracting minority groups should focus on characteristics consistent with minority cultural identity. Although self-image congruity and social identity do not guarantee brand preference, crafting messages that are directed to consumer’s self-concepts streamlines marketing plans to be most effective. About Nymex Consulting Nymex Consulting is one of the fastest growing management consultancy firm providing growth management, market expertise and a solid return of investment. Our sector focus includes FMCG, Retail, Food & Beverage, E-Commerce, Distribution and Outsourcing. Our functional expertise entails Strategy, Marketing, Sales & Distribution, Operational Efficiency, Risk Management and overall Project Management Office including topics such as Business transformation, Customer Base Management, Channel Management and Organizational redesign. We work with leaders and challengers combining our strategic vision for growth with a pragmatic and solution-oriented approach in our projects, delivering sustainable growth. For more information, please visit www.nymex-consulting.com