Bus 241 Chapter 11

11.3 Advertising

Advertisers spend billions of dollars on advertising each year hoping to build brand equity and boost sales. On the other hand, people watch advertising to be entertained and to be educated. Entertaining ads can be persuasive in that the good feelings created by the ad can spill over to the advertised product making sampling and trial more likely. Educational ads can be persuasive in that people preparing to make a purchase and searching for information will tune in and pay attention. Educational ads also help people feel better about recent purchase decisions or reinforce their brand loyalty. Famous retailer John Wanamaker is quoted as saying, "Half of the money I spend on advertising is wasted; the trouble is I don't know which half." To understand how advertising works and how to spend ad dollars wisely, one needs to carefully consider when people watch ads. First off, an ad's entertainment factor sets a ceiling on its potential effectiveness. Ads need laughter, drama or at least novelty so they will be memorable. Based on research done by Roper Starch, boring, poorly executed ads may take three to five times as many media dollars to accomplish the same goals as involving, well-executed ads. Next, people watch ads to learn about products they will purchase or to reinforce good feelings they have about products they have already purchased. This means the advertised products must be shown quickly in the ad, before the viewer loses interest. If the product is not shown quickly, the ad campaign must have a consistent look and feel so viewers recognize the advertiser without having to see the product. As an example, in the glory years of Federal Express, their ads had a consistent look and feel, and they were always entertaining. As a result, (1) the ads were viewed, (2) the message broke through the communication chaos, and (3) the product and advertiser were remembered. Advertising Objectives Generally, advertising campaigns seek to achieve one or more of the following objectives: (1) cognitive—build awareness, (2) affective—gain interest and liking, and (3) behavioral—stimulate action. These objectives follow stages in the consumer's decision-making process. Hierarchy of effects models, such as AIDA (attention, interest, desire, and action), delineate these stages. In the cognitive stage, advertising attempts to gain consumers' attention by making consumers' aware of the product and by building knowledge in the minds of consumers. In the affective stage, advertising seeks to move consumers along from interest in the product to desiring the product. The behavioral stage stimulates action—a purchase or a response to a request. To measure the effectiveness of an ad in building awareness (cognitive) and creating interest (affective), there are three questions marketing managers need to ask: (1) What percentage of people can remember the ad and product being advertised? (2) What percentage of people remembering the product can also remember the brand? (3) What percentage of people remembering the product and the brand can also remember the key benefit? With the best of ads, the percentage of people remembering the product, the brand, and the key benefit will be around 30%. With the worst of ads, the percentage can dip well below 5%. Campaigns using ads that are tested before they are aired usually perform better than other campaigns. But when testing is not possible, marketing managers should put their support behind ads that immediately show the product, make the brand clear, make the key benefit clear, and are entertaining. Performance metrics such as new purchases, repeat purchases, or responses to requested actions provide effectiveness measures for stimulating action (behavioral). Creative Brief Marketing managers communicate advertising strategy to advertising agencies using the creative brief. A creative brief consists of (1) brand legacy, (2) copy strategy, (3) executional considerations, (4) profiles of key customer groups, and (5) profiles of key competitors. A creative brief for Snickers candy bars might look something like this: Brand legacy. The Snickers brand was introduced in the 1930s. It is the best-selling candy bar of all time and has annual global sales of over $2 billion. Snickers consists of peanut butter nougat topped with roasted peanuts and caramel, covered with milk chocolate. The brand is known for its ability to satisfy, replenish needed energy,and indulge cravings for something sweet and nourishing. Copy strategy. Target - Adults and kids looking for a delicious energy boost. Benefit - Snickers is delicious, satisfying, and nourishing. It is revitalizing. Reason to Believe - Snickers consists of peanut butter nougat topped with roasted peanuts and caramel, covered with milk chocolate. Tone - Snickers is upbeat. It revives and revitalizes. Executional considerations. Strategic goals - the Snickers brand has an upbeat, revitalizing nature that provides a delicious way for people to live life to the fullest. Tactical goals - increase the rate of use by highlighting many different usage occasions. Execution style - humorous advertising in step with Snickers' upbeat, revitalizing nature. Key customer groups. Young adults aged 18-34 years living active lives and often too busy for regular meals wanting something delicious, filling, and energy-infusing. Older adults aged 35 years and above looking for a delicious and satisfying energy boost. Parents purchasing candy for children looking for a nourishing and satisfying alternative to sugar-only candy. Key competitors. Milky Way, a fluffy and light alternative to other chocolate bars targeted at young women. Butterfinger, a crispy and crunchy alternative to other chocolate bars targeted at rebellious young adults. M&M's, colorful, button-shaped candy-coated chocolates broadly targeted at all candy eaters; particularly those valuing convenience and the "Melts in your mouth, not in your hand" tagline. Media Buying It has been said that making appropriate media buys is more important than good creativity. That is probably an overstatement, but when and where marketing managers decide to show their advertising can have a huge impact on sales. When making decisions about where and when, marketing managers consider cost-per-thousand impressions (CPM), gross rating points (GRP), and target rating points (TRP). CPM refers to how many opportunities the general public has to view a particular ad. For example, if the marketing manager spends $100,000 to air four advertising spots on a television program viewed by 10 million people, then the CPM is $25. In comparison, CPM for ads placed on Facebook can be as low as a few cents. But the extra cost of television advertising can be of good value if potential customers watch the ad because it is more involving and entertaining than what Facebook ads can offer. Marketing managers also evaluate ad placement using GRP. A GRP is reach multiplied by frequency. Reach is the percentage of all households with televisions that have an opportunity to view an ad over the course of a media plan. Frequency is the number of opportunities a typical reached household has to view the ad over the course of a media plan. Let's say the media plan stretches over three months. One plan attains a reach of 50% of all households with televisions at a frequency of 4 yielding a GRP of 200. Another plan attains a reach of 25% of all households with televisions at a frequency of 8 yielding a GRP of 200. Assuming the plans cost the same, a marketing manager wanting to build brand awareness with an emphasis on reach would choose the first media plan. A marketing manager wanting to build brand interest by driving home brand benefits with an emphasis on frequency would choose the second media plan. Sometimes, marketing managers choose between media plans by maximizing GRP while minimizing cost. On the surface, this approach seems logical. However, GRP calculates reach using the percent of all households owning a television and not percent of households in the brand's target market. Let's say that a marketing plan attains a reach of 50% of all households with televisions at a frequency of 4 yielding a GRP of 200, but only 10% of the households are in the target market. The TRP would not be 200 but only 20. Consequently, marketing managers cannot simply maximize GRP with their marketing budget. They must deliver the right mix of reach and frequency to attain their marketing goals while maximizing TRP for each media dollar spent. Opportunity to See Media planning metrics are based on opportunity to see, not actual views of ads. Marketers may have a great media plan, but if no one takes the time to view the ad, they still have nothing. The creative is what gets the ad viewed. Creative directors occasionally capture lightning in a bottle with advertising everyone wants to watch. The same creative director could be working on the same brand and produce winning ads and losing ads. Nonetheless, it is important not to stifle the creative process by giving creative directors too much advice. It does, however, help to quickly show products, brands, and benefits. Sometimes, advertisers go to great lengths to produce advertising that people want to watch. As was explained in the previous chapter, Coca-Cola Australia invented sky surfing for one of their successful ad campaigns. Two young men riding snowboards jump out of an airplane, do aerial stunts, pop their parachutes, and then land next to several young women by an outback general store to enjoy a few ice-cold Cokes! This is an ad people wanted to watch and it did a lot to strengthen the Coca-Cola brand with their primary target audience.

11.8 Integrated Marketing Communications (IMC)

As time and technology move on and television programming and other entertainment options become more numerous and fragmented, the effectiveness of mass media advertising decreases. In terms of mass media advertising goals, what used to cost $2 million now costs $10 million. To address the issue, more emphasis is being put on coordinating all aspects of marketing communications, such as advertising, sales promotion, publicity, social media, and trade promotion. Integrated marketing communication focuses on the 4Cs rather than the 4Ps. The 4Cs being consumer rather than product, cost rather than price, convenience rather than place, and communication rather than promotion. The shift in focus asks marketing managers to put their emphasis on the consumer, the costs associated with product solutions in addition to purchase price, maximize the convenience of the consumption experience, and stress two-way company-consumer communication rather than one-way, top-down selling. Nearly all state-of-the-art promotional marketing programs are now great examples of integrated marketing communications. Ford marketing managers constructed an integrated marketing communications program geared to building up its brand strength in the compact car market. The Ford Focus underwent a major overhaul with dramatic improvements made to its performance and reliability. Ford needed a way to communicate the changes to its active, under 40 target audience, and improve its brand image and grow demand for the vehicle. "Focus Rally," an interactive reality web series, was designed to grab attention for product launch. A press conference in Detroit announced the promotion and drove consumers to the interactive website. Focus Rally connected with potential customers on multiple levels. Website visitors even determined the outcome of the Focus Rally "reality show." Teaming up with the producers of the "Amazing Race," Ford put together six teams of two people with strong social media personalities. Each team received a Ford Focus, which they drove on a road rally across the country for five weeks. To raise awareness, the Focus Rally sponsored the Super Bowl Pre-Kick show, peppering it with graphics, billboards, and TV spots to recruit more potential customers to join the online game. Ford also teamed up with Olympic gold medalist Jonny Moseley and other celebrities to add interest to interviews with the six Focus Rally teams. Three weeks prior to the start of the rally, the six teams were announced on the Focus Rally Internet splash-page. The rally teams used their social channels to recruit "virtual" team members. "Focus Followers" got involved by pledging support to a team and playing online to earn rewards. New media content was created daily for the Focus Rally show and aired on Hulu.com and distributed through digital, mobile, social, and game system platforms. Focus Followers communicated with their teams making suggestions for helping them win. Focus Followers were rewarded for game play with points, badges, and for the grand prize winner, a new Ford Focus. After eight weeks, more than 500,000 individuals had spent more than 66 million minutes online and had posted 120,000 comments on focusrally.com, Facebook, and Twitter. The net result was that more than 80% of the target audience had learned about the improvements to the Ford Focus before entering a Ford dealership. Even more impressive, the redesigned Ford Focus became the fastest-selling vehicle in its market segment during the first five months of its availability.

11.1 Introduction to Promotion Strategy

Companies must do more than create value for customers. They must communicate value and then deliver value. Marketing managers use elements of the promotion mix to communicate value by (1) informing customers and prospective buyers about the benefits of the firm's product offering, (2) persuading them to try or continue using the products, and (3) reminding them of the product benefits they experience to encourage repeat purchases. When students think of promotion, usually, they think of advertising. Certainly, advertising is a big part of promotion, but the promotion mix also includes sales promotion, personal selling, public relations, and direct marketing. Elements of the promotional mix work together, in the firm's integrated marketing communications (IMC), to provide a consistent message to the firm's target customers. Advertising and publicity are best at creating product awareness and interest. Sales promotions and personal selling are best at closing sales. Promotion strategy usually demands a lot of marketing manager's attention because promotional spending accounts for the lion's share of a marketing budget. In the next sections, tow basic promotion mix trategies will be identified (push promotion and pull promotion), as well as, learning to explore the elements of the promotion mix and discuss how each is used to communicate value to customers. Like all elements of the marketing mix, promotion plays an important role in attracting and keeping customers. Attracting and keeping customers drives profitability for a firm.

11.7 Direct Marketing

Direct marketing focuses on direct communication with consumers to encourage a direct response for a purchase, request for information, or visit to a website. Marketers use a variety of direct marketing activities including direct mail, catalog, online retailing, mobile marketing, television home shopping, and telemarketing. These methods enable marketers to connect directly with targeted consumers. Using detailed information from extensive databases, marketers can customize their product offerings to precisely defined segments. L.L. Bean, a leading merchant of outdoor gear and apparel, built a very successful business on the direct marketing model. Founded in 1912 by an avid outdoorsman, Leon Leonnwood Bean, the company started a nationwide mail order business by first collecting information about Maine hunting license holders and then preparing a descriptive mailer. Although L.L. Bean still uses mailers and catalogs, the company has expanded the business by employing digital directing marketing—online retailing.

Summery

Marketing managers use elements of the promotion mix to communicate value to customers. Value can be communicated through advertising, sales promotion, personal selling, public relations, and direct marketing. The objectives of promotion are to (1) inform customers and prospective buyers about the benefits of a firm's product offering, (2) persuade them to try or continue using the products, and (3) remind them of the product benefits they experience to encourage repeat purchases.

11.5 Personal Selling

Personal selling is two-way communication between a buyer and seller, designed to influence a purchase decision and develop customer relationships. High-cost, complex products and services that require demonstration are great candidates for personal selling. There are many types of salespeople. Usually, the types are categorized as order takers, order getters, retail salespeople, missionary salespeople, technical salespeople and service salespeople. Order takers. Order takers may work in retail sales, inbound phone sales, or business-to-business counter sales. Order takes do not receive a lot of training and generally earn low salaries. Order getters. Order getters have the ability to close sales, find new customers, and increase purchases by current customers. Order getters receive extensive sales training and earn compensation matching their level of productivity. Retail salespeople. Retail salespeople often do many other things than selling. They may help set up point-of-purchase displays, assist customers, restock shelves, and hand out free samples. Retail salespeople do not receive a lot of training and generally earn low salaries. Missionary salespeople. Missionary salespeople usually do not close sales, but travel to meet with potential customers to hand out literature and describe products. Pharmaceutical sales representatives are good examples of missionary salespeople. They detail medical products and drugs to doctors to encourage them to prescribe their products. Missionary salespeople are well trained and earn compensation matching their level of productivity. Technical salespeople. Technical salespeople are generally part of a business-to-business sales team. Engineers or other technical people help in the selling process by explaining technical innovations and describing how the innovations fit with and enhance a customer's business operation. Service salespeople. Service salespeople work with business-to-business customers after the sale is complete. They arrange for training, follow-up purchases, and maintain the positive relationship between vendor and client. Personal Selling Process With business-to-business sales, there are some basic steps to every sales engagement. These steps are prospecting and qualifying, pre-approach, approach, presentation and demonstration, handling objections, closing, and follow-up. Prospecting and qualifying require identifying potential customers and determining if they have the appropriate resources and buying authority to make a purchase. Preapproach consists of researching the potential customer, their business needs, position in their industry, and other factors helping the salesperson understand potential needs and how their products may add value. Approach is the first formal contact with a potential customer. The first contact is directed at building a relationship with the potential customer. As first impressions are lasting impressions, the approach is critically important to making a sale. Salespeople usually cannot win a sale with good approach, but they certainly can lose a sale with a poor approach. Presentation and demonstration are grouped into three categories. (1) carefully scripted presentation memorized by the salesperson, (2) formula presentation in which the salesperson asks specific questions and depending on the reply gives specific responses, (3) need-satisfaction presentation in which the salesperson uncovers the needs of a potential customer and proposes solutions based on his/her portfolio of products. Handling objections is generally part of the selling process because customers push back or raise questions. Salespeople handle objections by acknowledging them and then moving on with their presentation. For example, a potential customer may raise an objection regarding the high price of a product. The salesperson will acknowledge the high price by saying, "Yes, we cost more than the competitors and let me tell you why." The salesperson will then move on with the presentation. Closing gives a potential customer the opportunity to purchase. Although salespeople use a variety of closing techniques, one of the most effective methods for closing the sale is the summary-of-benefits close. With this method, the salesperson summarizes the two or three key benefits for the customer and then simply asks, "Based on what we have talked about today, do you feel comfortable purchasing our product?" For the less confident salesperson, an alternative is, "Based on what we have talked about today, how do you feel about purchasing our product?" Follow-up after the sale allows the customer to ask questions, review any special arrangements, and enables the salesperson to reinforce the good feelings the customer had when making the purchase. Managing the Sales Force Sales managers organize, motivate, and manage the sales force to increase sales performance for the company. Over the past 75 years, much research has investigated the determinants of salesperson performance. A meta-analysis of 115 studies, conducted by Churchill, Ford, and Walker, identified six determinants of salesperson performance: Aptitude consists of native abilities and enduring personal traits relevant to job performance such as mental abilities and personality. Personal characteristics, including physical traits, family background, education, work experience, and sales experience affect salesperson performance. Skill level or learned proficiencies at performing job activities can increase salesperson performance. Role perceptions of the job and understanding the expectations of role partners (e.g., sales managers and customers) affect salesperson performance. Motivation or the desire to expend effort on specific job activities influences salesperson performance. Organizational and environmental factors such as the company's competitive strength in the market or the salesperson's territory potential can affect salesperson performance. Sales managers would do well to consider these determinants of salesperson performance when designing the sales force strategy and structure. A company's sales force's strategy and structure can be broken down into five activities: setting sales force objectives, organizing the sales force, recruiting the sales force, training the sales force, and motivating the sales force.

11.6 Public Relations

Public relations consist of the activities designed to manage the public image of a person, organization, and/or brand. Years ago, a rolodex of names and phone numbers were the most powerful tool of public relations executives. Today, public relations executives have a much broader set of tools, including events, made-for-publicity television programming, and social media. Canon competes in a difficult market against Nikon and is always looking for new ways to gain traction with consumers. In particular, Canon marketing managers wanted to increase visibility of its digital single lens reflex (DSLR) cameras. To this end "Long Live Imagination" was launched with "Project Imagin8ion," a photo contest connected with a Hollywood short film created by filmmaker Ron Howard. For three weeks, consumers were invited to join YouTube.com/imagination, the contest hub. Photo submissions were in eight categories: setting, time, character, mood, relationship, goal, obstacle, and the unknown. Ron Howard and a group of Canon experts narrowed down the submissions, and then, finalists were selected with an online poll. Ron Howard then sorted through the finalists and picked eight winning photos. The photos were used to inspire his next film, to be shot with Canon digital SLRs and the Cinema EOS System. Bryce Dallas Howard, Ron's daughter, was selected to direct the short film. A television spot titled "Parade" highlighted how Howard's imagination was ignited by the photo submissions. Throughout production, Canon kept its audience interested through Facebook, Twitter, Flickr, and media exposure such as "The Today Show" and "Huffington Post." The short film, "When You Find Me" premiered at the American Museum of Natural History in New York. The eight winners and their guests were flown in to meet Ron Howard and walk the red carpet at the premier. On their way to the screening, over 600 guests at the premier walked through a corridor lined with over 100,000 photo submissions. The film was shown across the country, with screenings at the Sundance, South by Southwest, and Tribeca Film Festivals. It was also shown online. Festival attendees were invited to participate in the "Frame Your Imagin8ion" sweepstakes for the chance to win a Canon EOS DSLR kit. Canon representatives handed out kits encouraging potential customers to take their own photos to fit with each of the eight movie themes featured in the contest. Consumers uploaded over 100,000 photos during the 22-day sweepstakes. The website generated more than 1.16 million visits, and the online premiere received more than 74,000 views. Canon's share of DSLR sales went from 31.6% prior to the campaign to 50.5% six months into the campaign. On Black Friday, the day of the movie's premiere, their sales share reached 71.7%, making that November the best month in Canon Camera history.

11.4 Sales Promotions

Sales promotions are short-term incentives to encourage product trial by new customers and to increase repeat purchases by existing customers. Indeed, sales promotions encourage customers to buy now rather than later. They provide lower prices to price-sensitive customers who otherwise would not buy. They earn support, interest, and preferred shelf space from retailers. There are two basic types of sales promotions. The first type is a value-added promotion, such as a contest, sweepstakes, self-liquidating premium, or samples of a new product bundled together with a well-known product. The second type is a price-off promotion, such as coupons, rebates, and buy-one-get-one-free specials. Value-added promotions are best at building brand loyalty, defining brand personality, and introducing new, complementary products to brand champions. These promotions also have potential for dramatically increasing sales as they transform into annual rituals. Each year McDonald's restaurants boost sales with their ever-popular Monopoly game in which patrons win instant prizes on Monopoly tokens they are given with their purchase,s as well as having opportunities to win bigger prizes for assembling full sets of Monopoly tokens. McDonald's Monopoly promotion is a hybrid, containing elements of a price-off promotion and a value-added promotion. Price promotions can undermine brand equity and trade temporary increases in market share for permanent decreases in sales margin. Price promotions usually work best for products that are consumed faster when greater quantities are in the home. Customers find more occasions and reasons to consume these types of products and occasional price promotions can increase their consumption rate. On the other hand, it is usually a bad idea to run price promotions on products that customers can easily stock up on, but use at a constant rate. What Sales Promotions Do Sales promotions encourage potential customers to buy now rather than later. They increase repeat purchase. They encourage product trial by new customers. Sales promotions rationalize prices across regions when a product is selling better in one region than in another. They provide lower prices to price-sensitive customers who otherwise would not buy. They earn support, interest, and preferred shelf space from retailers. Cause-Related Promotions These promotions allow customers to support a good cause along with purchasing a product they need. Research explains, more than two-thirds of US consumers report purchasing brands due to a connection to a cause they want to support. In markets where there is not much product differentiation, cause-related promotions can be very effective. Wonder Bread competes in a mature product category. It is hard to stand out from all of the different brands. To increase its visibility in supermarkets, marketing managers created the "7 Wonders of the USA Teacher Tour." The promotion asked school-aged children and their moms to nominate heroic teachers with a short 100-word essay describing how the teacher inspired students and made learning fun. The recognition contest was highlighted through parent-teacher associations, Teach for America email blasts, press releases, popular blogs, point-of-purchase in-store displays, Facebook, Twitter, and Wonder Bread promotional packaging. The seven winning teachers were invited to teach a class via satellite from the location of seven wonders of the United States: the Grand Canyon, Mt. Kilauea, the Statue of Liberty, Jazz Park in New Orleans, Washington D.C.'s National Mall, the Kennedy Space Center, and Mt. Rushmore. More than 3,200 nominations were received, with 3,000 point-of-sale displays ordered and 24 million loaves of Wonder Bread carrying the promotion. The campaign was credited with 620 million consumer impressions and added nearly 5,000 Facebook fans to the Wonder brand. The promotion's landing page received 17,000 visits and $5,000 was donated to Teach for America. Trade Promotions When marketing managers offer buying incentives to retailers rather than consumers, they are doing a trade promotion. In a trade promotion, retailers are offered reduced prices called trade allowances, as well as free product displays, free merchandise, or other incentives. Trade promotion is often needed to encourage large retailers to stock a manufacturer's products. Of all trade promotions, trade allowances are the most popular. Examples of trade allowances are reducing unit price for (1) purchasing larger quantities, (2) offering eye-level or end-of-aisle shelf space, (3) highlighting the product with in-store advertising, and (4) having store salespeople actively promote the product. On average, for every dollar a manufacturer spends on advertising, two dollars are spent on trade promotion. In addition to receiving price reductions, manufacturers also offer advertising dollars, called co-op advertising, to retailers that include their products in weekly sales circulars.

11.2 Push versus Pull

When designing promotion strategy and allocating promotion resources, marketing managers make decisions regarding two options: push promotion or pull promotion. A push strategy pushes products through the channel of distribution. Producers direct their marketing activities toward channel members (wholesalers and retailers) to encourage them to order and stock the product. Personal selling and trade promotions play important roles in this process. Channel members then use marketing activities to push the products to final consumers. The objective is to push products from producer to channel member and then from channel member to final consumers. For example, Pfizer, a multinational pharmaceutical company, uses a push strategy by deploying pharmaceutical representatives to call on physicians (channel members). The objective is to encourage physicians to prescribe Pfizer products for patients (final consumer). With a pull strategy, producers direct their marketing activities toward the final consumer to encourage them to ask retailers (channel members) for the product. Demand from final consumers causes retailers to order the product from producers or manufacturers. Thus, the product is pulled through the channel of distribution. Pfizer uses both push and pull strategies. Pfizer advertises products to the final user to encourage them to ask their doctors for the product by name. Frito-Lay promotes Doritos brand tortilla chips to final consumers to increase demand at retail. Although there are many opinions about what constitutes pull versus push marketing, most marketers agree on the following points: first, image-building mass media advertising and public relations are examples of pull marketing. These promotional activities pull potential customers into a store to seek out and purchase a product. Second, price-oriented trade promotions and price discounts are examples of push marketing. These promotional activities attract in-store attention and push products into shopping carts. In general, pull marketing builds brand preference and loyalty by emphasizing "play-to-strength" product distinctions. Push marketing stimulates immediate market results by offering low prices, free samples, and/or other incentives for people to take action immediately. Marketing managers often feel tremendous pressure to produce immediate and measurable results with their marketing budget. The results of push marketing are easy to measure. Marketers can observe immediate jumps in sales, count coupon redemptions, and add up increases in shelf space. Senior managers love push marketing because the results are quick and easy to measure and report up the organizational chain. However, basing marketing strategy on incentives such as giveaways and low prices can be dangerous. In a world of incentives, consumers become more sensitive to prices, low-cost producers are handed a competitive advantage, and profitability may be driven out of an industry. The most important measures of marketing excellence are margin and profit. Are company margins and profits below average, average, or above average in your industry? Brand equity earns high margins and profitable, loyal, long-term customers. It does not take great marketing to give away products at low prices. Pull marketing is an important way to build brand equity and long-term competitive advantage.