Session 3

·         Total benefit = Total Functional Benefit + total subjective benefits

Apart from functional benefits which a brand offers, it also offers subjective benefits. Say why a person purchases Rolex watch or a Mercedes car? Apart from functionality I am buying status. 

·         Brands also acts as “Extended Self”

Consumers tend to extend the brand to what they believe and what goes well with their personality. Before purchasing a brand, we not only communicate with external world but also with ourselves.

Total perceived value = Total perceived benefit/ Total perceived cost

Total Perceived Benefits = Functional benefits + Subjective benefits

Total Perceived Cost = Financial Cost (Price) + Non-Financial Cost (Time, Effort, Tension)  

As Total Perceived Benefits increases, probability of brand Purchase increases

Functional benefits can be increased by augmented benefits for e.g. Watch also functions as calculator

Total perceived value can be increased by reducing the cost or by increasing the benefits For e.g.

1.       Combo products: Reduces financial cost

2.       Free product (Bundling): Increases functional benefits 

·         Communication of Buyer occurs at 2 different levels

o   With oneself  - Effect is purchase

o   With outside world – Effect is the buyer seeks what do people perceive about him after the purchase

·         There are 2 aspects to tell about one’s lifestyle

o   Behavioural and Personality

o   Dressing Sense

·         Verbal and Non-verbal communication

o   Attire

o   The gadgets or material one uses

·         Differentiation and USP

o   The role is to increase the total perceived value

·         Communication

o   The approach to solve the problem that arrives during communication

§  Outside-In Approach

§  Inside-Out Approach

o   Communication is to be done by marketer and the challenge is to communicate at 2 different levels

§  With Customers

§  With R&D team

The language of communication is entirely different for both

Value Creation – Manufacturer

Value Delivery – Distribution