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Brand Management

Week 02

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The Brand Equity Concept

No common viewpoint on how it should beconceptualized and measured

It stresses the importance of brand role inmarketing strategies.

Brand equity is defined in terms of themarketing effects uniquely attributable to thebrand.

Brand equity relates to the fact that different outcomes

result in the marketing of a product or service because of itsbrand name, as compared to if the same product or service

did not have that name.

1.2

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Strategic Brand Management It involves the design and implementation of marketing

programs and activities to build, measure, and managebrand equity.

The Strategic Brand Management Process is defined asinvolving four main steps:

1. Identifying and establishing brand positioning and values

2. Planning and implementing brand marketing programs

3. Measuring and interpreting brand performance

4. Growing and sustaining brand equity

1.3

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1.4

Strategic Brand Management Process

Mental maps

Competitive frame of reference

Points-of-parity and points-of-difference

Core brand values

Brand mantra

Mixing and matching of brand elements

Integrating brand marketing activities

Leveraging of secondary associations

Brand value chain

Brand audits

Brand tracking

Brand equity management system

Brand-product matrix

Brand portfolios and hierarchies

Brand expansion strategies

Brand reinforcement and revitalization

Key ConceptsSteps

Grow and sustain

brand equity

Identify and establish

brand positioning and values

Plan and implement

brand marketing programs

Measure and interpretbrand performance

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Stage 1: Identifying and establishing brand positioningand values

Brand positioning Chapter 3

Core Brand Values set of abstract associations (benefitsand attributes) that characterize a brand.

Brand Mantra short three-to-five word expression of themost important aspects of the brand and its core brandvalues.

Brand Audit comprehensive examination of the brand,involving activities to assess the health of the brand,uncover its sources of equity, and suggest ways to improveand leverage the equity.

Stage 2 Planning and Implementing Brand Marketing

Programs Customer Based Brand Equity Chapter 2

Choosing the brand elements logos, symbols, signs etc.

Figure 1.14 on page 46 (2nd Edition)NEXT SLIDE

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CONSUMER KNOWLEDGE EFFECTS

Brand Awareness

Depth

Recall

Recognition

Breadth

Purchase

Consumption

Brand Associations Strong

Relevance

Consistency

Favorable Desirable

Deliverable

Unique

Points of Parity

Points of Difference

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2.9

CHAPTER 2:CUSTOMER-BASED BRAND EQUITY

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2.10

Customer-Based Brand Equity

The differential effect that brand knowledge

has on consumer response to the marketing of

that brand.

Keller, 1993

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2.11

Customer-Based Brand Equity

Differential effect Differences in consumer response

Brand knowledge

A result of consumers knowledge about thebrand

Consumer response to marketing Choice of a brand

Recall of copy points from an ad Response to a sales promotion

Evaluations of a proposed brand extension

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2.12

Brand Equity as a Bridge

Reflection ofpastinvestments in the marketing

of a brand

Direction forfuture marketing actions or

programs

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2.13

Making a Brand Strong:

Brand Knowledge

Brand knowledge is the key to creating brand

equity.

Brand knowledge consists of a brand node in

memory with a variety of associations linked

to it.

Brand knowledge has two components: brand

awareness and brand image.

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2.14

Sources of Brand Equity

Brand awareness

Brand recognition

Brand recall

Brand image

Strong, favorable, and unique brand associations

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2.15

Brand Awareness Advantages

Learning advantages

Register the brand in the minds of consumers

Consideration advantages

Likelihood that the brand will be a member of the

consideration set

Choice advantages

Affect choices among brands in the consideration

set

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2.16

Establishing Brand Awareness

Increasing the familiarity of the brand through

repeated exposure (for brand recognition)

Forging strong associations with the

appropriate product category or other

relevant purchase or consumption cues (for

brand recall)

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2.17

Creating a Positive Brand Image

Brand Associations

Does not matter which source of brand

association

Need to be favorable, strong, and unique

Marketers should recognize the influence of these

other sources of information by both managing

them as well as possible and by adequatelyaccounting forthem in designing communication

strategies.

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2.18

The Four Steps of Brand Building

1. Ensure identification of the brand with customersand an association of the brand in customers minds

2. Establish the totality of brand meaning in the minds

of consumers3. Elicit the proper customer responses to the brand

identification and brand meaning

4. Convert brand response to create an intense, active

loyalty relationship between customers and the

brand

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2.19

Four Questions Customers ask of Brands

1. Who are you? (brand identity)

2. What are you? (brand meaning)

3. What about you? What do I think or feelabout you? (brand responses)

4. What about you and me? What kind of

association and how much of a connection

would I like to have with you? (brand

relationships)

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2.20

Customer-Based Brand Equity Pyramid

RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =

What about you and me?

3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?

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Sub-Dimensions of CBBE Pyramid

LOYALTY

ATTACHMENT

COMMUNITY

ENGAGEMENT

QUALITYCREDIBILITY

CONSIDERATION

SUPERIORITY

WARMTH

FUN

EXCITEMENT

SECURITY

SOCIAL APPROVAL

SELF-RESPECT

CATEGORY IDENTIFICATION

NEEDS SATISFIED

PRIMARY CHARACTERISTICS &

SECONDARY FEATURES

PRODUCT RELIABILITY,

DURABILITY & SERVICEABILITY

SERVICE EFFECTIVENESS,

EFFICIENCY & EMPATHY

STYLE AND DESIGN

PRICE

USER PROFILES

PURCHASE & USAGE

SITUATIONSPERSONALITY &

VALUES

HISTORY, HERITAGE

& EXPERIENCES

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2.22

Salience Dimensions

Depth of brand awareness

Ease of recognition and recall

Strength and clarity of category membership

Breadth of brand awareness

Purchase consideration

Consumption consideration

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2.23

Depth and Breadth Importance

The product category hierarchy shows us not

only the depth of awareness matters but also

the breadth.

The brand must not only be top-of-mindand

have sufficient mind share, but it must also

do so at the right times and places.

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2.24

Product Category Structure

To fully understand brand recall, we need to

appreciateproduct category structure, or how

product categories are organized in memory.

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2.25

Performance Dimensions Primary characteristics and supplementary

features

Product reliability, durability, and serviceability

Service effectiveness, efficiency, and empathy

Style and design

Price

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2.26

Imagery Dimensions

User profiles

Demographic and psychographic characteristics

Actual or aspirational

Group perceptionspopularity

Purchase and usage situations

Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc.), location, and context of usage

Personality and values

Sincerity, excitement, competence, sophistication, and ruggedness

History, heritage, and experiences

Nostalgia

Memories

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2.27

Judgment Dimensions

Brand quality

Value

Satisfaction

Brand credibility Expertise

Trustworthiness

Likeability

Brand consideration

Relevance

Brand superiority

Differentiation

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2.28

Feelings Dimensions

Warmth

Fun

Excitement

Security

Social Approval

Self-respect

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2.29

Resonance Dimensions Behavioral loyalty

Frequency and amount of repeat purchases

Attitudinal attachment Love brand (favorite possessions; a little pleasure)

Proud of brand

Sense of community Kinship

Affiliation

Active engagement Seek information

Join club

Visit website, chat rooms

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Customer-Based Brand Equity Model

Consumer-

Brand

Resonance

Brand Salience

Consumer

Judgments

Consumer

Feelings

Brand

PerformanceBrand

Imagery

INTENSE, ACTIVE

LOYALTY

RATIONAL &

EMOTIONAL

REACTIONS

POINTS-OF-

PARITY &POINTS-OF-

DIFFERENCE

DEEP, BROAD

BRAND

AWARENESS

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2.31

Brand Building Implications

Customers own brands.

Dont take shortcuts with brands.

Brands should have a duality.

Brands should have richness.

Brand resonance provides important focus.

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2.32

Creating Customer Value

Customer-brand relationships are the

foundation of brand resonance and building

a strong brand.

The customer-based brand equity model

certainly puts that notion front and center.

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2.33

Is a company consumer-centric?

1. Is the company looking for ways to take care of

you?

2. Does the company know its customers well

enough to differentiate between them?3. Is someone accountable for customers?

4. Is the company managed for shareholder value?

5. Is the company testing new customer offers andlearning from the results?

Sources: Larry Selden and Geoffrey Colvin, 2004.

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2.34

Customer Relationship Management (CRM)

Uses a companys data systems and

applications to track consumer activity and

manage customer interactions with the

company

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2.35

Customer Equity

Blattberg and Deighton (1996) offer eight guidelines as ameans of maximizing customer equity:

Invest in highest-value customers first

Transform product management into customer management

Consider how add-on sales and cross-selling can increase customerequity

Look for ways to reduce acquisition costs

Track customer equity gains and losses against marketing programs

Relate branding to customer equity Monitor the intrinsic retainability of your customer

Consider writing separate marketing plansor even building twomarketing organizationsfor acquisition and retention efforts

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2.36

Customer Equity

The sum of lifetime values of all customers Customer lifetime value (CLV) is affected by

revenue and by the cost of customer

acquisition, retention, and cross-selling Consists of three components:

Value equity

Brand equity

Relationship equity

Rust, Zeithamal & Lemon, 2004

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2 37

Relationship of Customer Equity to Brand

Equity

Customers drive the success of brands butbrands are the necessary touchpoint thatfirms have to connect with their customers.

Customer-based brand equity maintains thatbrands create value by eliciting differentialcustomer response to marketing activities.

The higher price premiums and increasedlevels of loyalty engendered by brandsgenerate incremental cash flows.