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how retailers build a brand image and increase customer loyalty by using imc programs

     Explain how retailers build a brand image and increase customer loyalty by using communication programs

    Marketing and promotion help facilitate exchange by providing information and context to consumers to help them understand how specific good and services can meet their needs. Integrated Marketing Communication plays an essential role in this process, made even more important with the rise of the omni-channel. It (IMC) harnesses the benefits of each channel to build a clearer and broader impact than individual or singular campaigns.


    • Define brand equity
    • Outline the steps involved in the creation of a marketing communication program (SMART)

    Brand Equity

    Brand equity refers to the intrinsic value a brand has, given consumers’ awareness of it and affinity for it. It is the product of Brand identity, meaning how a brand represents itself and its value publicly, and brand image–what attributes and values consumers project on the brand. It is commonly believed that the owner of a well-known brand name can generate more revenue (compared to the owner of a lesser or unknown brand) simply from brand recognition. That is, consumers believe that a product with a well-known name is better than products with less well-known names.

    Brand equity has been studied from two different perspectives: cognitive psychology and information economics. According to cognitive psychology, brand equity lies in the consumer’s awareness of brand features and associations, which drive attribute perceptions. According to information economics, a strong brand name works as a credible signal of product quality for imperfectly informed buyers and generates price premiums as a form of return to branding investments.

    The better a consumer knows and understands a brand, perceiving it as favorable, the more likely that they’ll ascribe those same attributes to the brand’s products. For example, the marketers responsible for the Cheerios™ brand might describe Cheerios™ brand identity as wholesome, nutritious, and inclusive, perfect as a “first food” for toddlers through adulthood. And, if you, as a consumer, understand and believe this positioning for the Cheerios™ brand, you are more likely to believe that all flavors and versions of Cheerios™ cereals are wholesome, nutritious. and inclusive. Further, you might be more willing to purchase a new item from the Cheerios™ brand ahead of a rival product from Kellogg’s® or Post®, believing that the Cheerios™ brand implies high(er) quality.

    Brand equity is important for marketers because consumers’ knowledge about a brand also governs how manufacturers and advertisers market the brand. For example, a brand that is not well known and/or not highly regarded requires far more investment and support to generate awareness and affinity. That’s because brand equity is created through strategic investments in communication channels and market education. When successful, these investments appreciate through economic growth in profit margins, market share, prestige value, and critical associations.

    That said, brand equity is difficult to quantify, and there is no consensus on how to measure it. One issue is the potential disconnect between quantitative and qualitative equity values. Quantitative brand equity includes numerical values such as profit margins and market share, but fails to capture qualitative elements such as prestige and associations of interest. Overall, most marketing practitioners take a more qualitative approach to brand equity because of this challenge.

    Further, recognition and affinity doesn’t imply intent to buy. Luxury brands clearly illustrate this phenomenon. For example, a consumer may be aware of the Porsche brand and feel very strongly about it. Yet, this reflection of brand equity does not necessarily mean that the consumer is actively shopping for or able to purchase a Porsche model. Nevertheless, brand equity is an important consideration for marketers as they determine how to market their brand, understanding that brand equity is created and sustained through strategic investments in IMC.

    We’ve discussed in detail the concepts of brand image, brand identity and brand equity, but there are other associated terms that we should mention as well: brand loyalty and brand recognition. These all represent the potential benefits of a healthy, strong brand. When we apply these concepts to a retail assortment mix, the benefits become quite apparent.

    Strong manufacturer brands in a retail assortment add positive image and prestige to the retailer’s own image. Brand recognition and loyalty make it easier for the retailer to derive revenue from the trusted brand products they carry because they are easier to sell. Branded products allow the retailer to create an expanded merchandise mix, using the brand as an “umbrella” over lower-priced lines of goods that could include store label products.

    In addition to adding legitimacy and image, a dependable sales revenue stream, and an expanded assortment mix, branded products provide other benefits to the retailer as well. Typically, manufacturer brands conduct multi-channel promotions at key periods during a selling season. It wouldn’t be Father’s Day without dress shirt, neckwear, polo, and golf club promotions. Super Bowl promotions include everything from chips and hot dogs to high-definition video products. And the holidays, where retailers typically produce 50% of their annual sales in just 6-8 weeks, are always where we see creative promotions from almost all branded suppliers to maximize that all-important selling season.

    Retailers’ participation in these branded promotions can vary, but as we saw from the Pillsbury Bake-off case in an earlier section, participation can be extensive: from shared advertising across channels to in-store displays and presentations to the actual purchase transaction itself. And it should be noted that manufacturer brands will often offer special discounts, payment terms, and other incentives to retailers for these events.

    On another level, many of the benefits of branding such as brand image, brand loyalty, and brand equity translate to the brand of the retailer itself. Here are some examples of retailers and their brand image:

    • Walmart- a super store noted for its huge assortments and low everyday prices.
    • Abe’s Market- best natural products regardless of the size or scale of the maker.
    • Nordstrom- a department store synonymous for luxury, high-end fashion goods.
    • Costco- a warehouse store that offers deals for buying in quantity.
    • REI- built on the image of the true outdoors, adventure, and ecology.
    • Sephora- the “Nordstrom” of beauty products.
    • IKEA- an overwhelming enterprise of ready-to-assemble furniture and home accessories.

    When a retailer has successfully established its brand like those listed above, one could go down the list of the “6 P’s” of retail marketing and see benefits in each category. If the AIDA model were to be applied to retail brands, retailers with a strong brand would already have some degree of mind-share–when a consumer thinks about options for cosmetics, healthy snacks, or hiking gear needs, wouldn’t brands like Sephora, Abe’s, and REI come to mind? All in all, the strength of branding in the mind of the consumer provides a host of solid benefits to both retail and supplier businesses.


    Marketing Communication Program (SMART)

    As you consider your advertising and promotion plan, it’s important to keep three (3) things in-mind:

    1. How can we maximize coverage, given budgets?
    2. What channels will be the most effective?
    3. How will we assess campaign performance?

    The first should be self-evident. While there may be temptation to match the proliferation of channels with an effort to be present in each, there is a finite limit to what organizations can and should invest in their marketing activity, given their strategy, resources and the competitive environment. Considering the costs of developing content and securing access in each channel, it would be incredibly expensive to run campaigns in all channels.

    Further, being present in every channel may lead to diminishing returns. It’s rarely possible and seldom advisable to spread messages across all channels, knowing that the increased reach will likely mean sacrificing frequency and the need for multiple impressions. Consider the question we posed earlier, “Was each ad beneficial, or did some get ‘tuned out’ because the consumer had already decided that the product was right for them?”

    Think about it this way. If a marketer messages on its website, Facebook page, Twitter feed, then pays for banner ads, billboards, print ads in magazines and television commercials, the message has incredible reach and assumed frequency, likely generating high impressions. What would the further benefit be of incorporating radio into the campaign? What if we messaged on Instagram or added paid search? Would this be duplicative to the television activity? Or, would it be complementary?

    One way to answer the question is to think of the second question. That is, examine the Customer Journey to understand how consumers shop the product or service and how the channels function to deliver information. In what channels are the target consumers present and engaged? What are their explicit needs at given contact points and in each channel. How does the channel meet a shopper’s needs for information or support? Instead of spreading marketing investments across all channels, like spreading peanut butter across a slice of bread, most marketers will “over-invest” in specific channels, selecting the ones that provide the greatest benefit. This could mean the widest audience, the highest level of interaction, the best fit with the specific target market or another criterion.

    For example, if you’re responsible for a well-known brand that generates organic, i.e. natural, web traffic to your own site, it may mean paid search is less important for you. But, this also means that SEO is critically important, so that your site ranks well and shoppers can find what they’re looking for.

    Or, if you find that a high percentage of your followers on social media are prospects, it might be worthwhile to invest in creative and messaging there. (By some estimates, existing customers outnumber prospects on social media by 4:1. However, that also means that 20% of followers are prospective customers—that shouldn’t be overlooked.)

    If your product/ service is complex or highly visual, you might want to consider how best to share details with your target. If complex, would a magazine ad work well? What about blogs or video blogs where influencers describe the product and benefits?

    If it’s a visual item, would you ever consider radio? Or, would print work best?

    And, of course, we need to determine how best to measure the effectiveness of the campaign, i.e. the messaging, channels and impact on consumers. Like allocating a budget, the determination of a campaign’s performance is specific to the firm’s strategy, resources and the competitive environment. For example, if an organization is launching a new product or service, their priority might be upon building initial consumer awareness and trial. We see this commonly in the grocery industry, when new and seasonal items are featured in advertising and in-store merchandising, e.g. Oui™ French style yogurt by Yoplait® and Hershey’s® Gold caramel crème candy bar.

    Now, compare this to our evaluation of The Coca-Cola Company. In them we saw a dominant, global brand advertising products with widespread distribution and consumption. Clearly, they aren’t trying to develop awareness and trial. More likely, in this case, they’re advertising to reinforce the emotional benefits of drinking the beverage to support brand affinity and to keep it “top of mind.” These goals are much different than what’s in play for a firm supporting new items or services.

    Alternatively, advertising can be a useful tool, if the brand equity has been impaired– if a firm has suffered a public relations issue. In this case, the intent of the marketing activity might be to improve customer perception. After their well-publicized account fraud scandal brought about by the creation of millions of fraudulent savings and checking accounts without customer consent, Wells Fargo has initiated an advertising campaign to “Earn back your trust.” Clearly, these messages are aimed at restoring confidence in the brand and organization, following the scandal and resulting $185 million in fines & penalties.

    Regardless of the motivation for or objectives of the advertising campaign, marketers should be guided by the mnemonic acronymSMART. Independent of the specific goals, i.e. reach, impressions, brand awareness or other measures, SMART gives criteria to guide in the setting of objectives. The letters S and M usually mean specific and measurable. Possibly the most common version has the remaining letters referring to achievable, relevant and time-bound.

    SMART was introduced in a paper by T. Doran called There’s a S.M.A.R.T. way to write management’s goals and objectives. Subsequent authors have adjusted their meaning slightly to:

    • Specific, i.e. targeting a specific area for improvement.
    • Measurable, i.e. quantifiable or at least suggest an indicator of progress.
    • Achievable, i.e. realistically be achievable, given available resources.
    • Relevant, i.e. applicable to the current objective and supportive of the broader strategy
    • Time-bound, i.e. specific to a given period when the result(s) can/ should be achieved

    It’s important to apply these criteria to assessment of the campaign. Without them and clear understanding of the scope, it becomes too difficult to understand the impact of the marketing activity. For example, without a specific objective, is customer awareness more important or sales (as an indicator of trial)? If there aren’t measures or the objectives aren’t actionable, can we accurately assess correlation or causation? By the same token, if the objectives aren’t realistic, do we get an incorrect impression of the marketing activity’s impact for good or for bad? And, if not time-bound, will we know how quickly to make adjustments to our plan to improve return?

    Thus, it’s important to keep three things in-mind, when building an advertising and promotion plan:

    1. How can we maximize coverage, given budgets?
    2. What channels will be the most effective?
    3. How will we assess campaign performance?

    Avoid the temptation to match the proliferation of channels with an effort to be present in each, given the costs of development and the risk of diminishing returns. Examine the Customer Journey to understand how consumers shop the product or service and how the channels function to deliver information. Apply the SMART criteria to assess the campaign objectives to manage scope and to understand impact.

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