STRATEGIC BRAND MANAGEMENT

MCOM 501

Dr. Bar Ursava

Lecture I

NAVIGATING THE CONSUMER MIND

Parts of the Brain
Neural Networks
Brands in Memory
Brand Cognition
Brand Emotions

The Mental World of Brands, Franzen, G & Bouwman, M., World Advertising Research Center, 2001
The Branded Mind, Du Plessis E., Kogan-Page, 2011
Descartes Error: Emotion, Reason and the Human Brain, Damasio A., Harper Collins, 1995

BRAND
What is brand anyways?
How would you define brand in one word?
A name, symbol, logo, message, promise, all, none?
According to AMA brand is a name, term, design, symbol, or any

other feature that identifies one seller's good or service as distinct

from those of other sellers. The legal term for brand is trademark. A
brand may identify one item, a family of items, or all items of that
seller. If used for the firm as a whole, the preferred term is trade
name.
In the good old marketing mix, brands do not even appear

BRAND
What is missing in the AMA definition?
The mind
A brand does not sit on a shelf next to other brands, it exists in

the minds of consumers. Otherwise, the brand does not exist

An understanding of brand and brand management without

knowing how the consumer mind works is never complete

Therefore, this course begins with a journey to the center of the

mind

Decision Making in a Nutshell

Consumer decision making can be seen as a three step

process
Input
Firms marketing efforts (information, need creation)
Sociocultural inputs

Process
Need recognition: occurs when a consumer is faced with a

problem (distance between actual and desired states)

Information search: internal (past experiences, memory) &
external info search (commercial & noncommercial info)
High risk decisions involve extensive information search

Evaluation of alternatives: evoked set (consideration set) &

selection criteria (price and other product attributes)

Output (purchase & post-purchase behavior),
Looks like a perfect world, doesnt it?

A New Understanding of Consumers

Theoretical economics traditionally conceptualized humans

as rational decision makers

Value maximization goal based on price and other product

attributes
In the late 1960s consumer behavior emerged as a new

discipline and criticized the economic man theory

No perfect market information (limited knowledge of available

brands and product attributes)

No perfect information processing
Avoidance of extensive problem solving
Humans as cognitive misers
Therefore, no perfect decisions

A New Understanding of Consumers

Consumer research demonstrated that we do not make

purely rational decisions when it comes to choosing brands

Use of heuristics in an information overload environment
Guided by emotions and mood instead of rationality
Impulsive & compulsive buying

A more thorough look into the consumer mind is required to

understand how we behave in the marketplace

Research in social psychology, cognition & emotion
Neuroscience as a new research tool
Understanding the how and why requires scientific research and

theory development

Evolution-Designed Brain
Our brain is a fabric of three systems, which represent our

evolutionary phases
Reptile (instinct)
Mammal (emotion)
Human (reason)

These three components

function in a closely connected

way (they blended into a new
whole during evolution)

Evolution-Designed Brain
These systems have different ages, directed at different interests
Reptilian (proto-reptilian) brain
Controls physiological needs (eating, drinking, sleeping, waking, sex, blood
pressure, body temprature, etc.) & hosts instinctive reactions (sea turtles
walking to the sea after hatching, human baby firmly gripping mothers hair, etc.)
Paleocortex (Mammalian brain)
Houses emotions (happiness, fear, anger, etc.) and deep-seated motivations

(womens need to nurture, mens need to protect, organize, fight, etc.)

Limbic System

Neocortex / Cerebral cortex (Neomammalian brain)

Higher brain functions (thinking, reading, writing, speaking and understanding
language, music, mathemathics, ethics, etc.)
Contains several areas that are specialized performing specific functions
(processing visual info, awareness of touch, directing muscular movements,
etc.)

Left & Right Hemispheres

Left brain
Logical, exact, analyzes and geared toward detail

Right brain (my personal favorite)

Emotional, abstract, geared toward coherence

Left & Right Hemispheres

Both hemispheres are highly interconnected and function in

a parallel fashion
Corpus Callosum

Both halves needed to interpret a brand and its message

Left brain processes knowledge elements of the brand, etc.
Which articles are sold under that brand, how the brand name is written

Right brain processes visual and emotional elements

How does it look? Do I like it? etc.

The Neural Network

The human brain contains approx. 40 billion brain cells (neurons)
A neuron consists of
A cell body (the soma)
A fibre for sending signals (the axon)
Fibres for receiving incoming signals (dendrites)
Neurons are interconnected via these fibres (neural network)
One neuron may have direct / indirect contact with 50.000 others to send

and receive information

A neuron can fire up to 1000 times per second
The huge number of neurons, each with thousands of contact points

yields an unbelievable storage and processing capacity

Total amount of info stored in an average brain could fill 20 million thick books

The Neural Network

The brain continuously gets impulses from your senses

even while sleeping

One minute of brain activity involves 100.000 to 1 million
chemical reactions
These reactions use a huge amount of body energy
The brain consists of 3% of body weight but uses 30% of body

energy at rest
Brain scans show a kaleidescope of constantly changing activity
even at rest
During complex tasks, the whole cerebrum lights up
Automatic reactions (the purple elephant)

The Neural Network

Human memory consists of billions of these neural networks
Each connection from cell to cell may be strong or weak
Learning: Through repetition specific connections becomes stronger

(Brand knowledge is simply a network of cell connections in our

brain)
Forgetting: Connections that are not active become weaker
This explains how & why consumers react to certain brands in a
certain way (based on brand knowlege, image, etc.)

Therefore, brand management (at its core) deals with

managing the neural information networks in consumers

minds

The Neural Network

Neural brand networks consist of connections of varying

strength.
The more frequently specific connections are activated, the

stronger they become

The more a brand name is connected with certain bits of
information (marketting efforts, individual experiences, etc.) the
more it penetrates into the network
The neural basis of a specific memory is called the engram

(physical representation of a specific memory)

Brand engram: representation of a brand at neural level (where in

our brain sits the Pepsi engram?)

The Very Basics of Memory

What is the function of memory?
It helps to survive. Humans make decisions about present & future

events based on past experiences

How are the stimuli that reach our senses recorded in our

memory?
The three step model of memory (Atkinson & Shriffin, 1971)
Sensory memory short term memory long term memory

The Very Basics of Memory

In recent theoretical models, the idea of short term memory (as a

passive recorder) is replaced with the concept of working
memory

It is an active processor of information between what we know (long

term memory) and the outside world (external stimuli)

Brand stimuli and brand representations in the memory meet in

the working memory

Meanings from the long term memory are drawn to interpret external
brand stimuli

The Very Basics of Memory

Memory can be reconstructed (false memory paradigm)
Marketers can reshape consumers memory (even bad ones) of a

brand to become more favourable

Post experience advertising effects on memory
Advertising received after a direct product experience can alter

how consumers remember their sensory and affective responses to

that brand
Orange juice
The Linden experiment

Brands in Memory: Associative Networks

Memory is built of neural connections that are the basis of

mental associations
These connections are the final products of learning processes

Mental associations can be seen as connections between

memory elements

Brands in Memory: Associative Networks

Association Laws
Contiguity: elements that are perceived together will be connected
Repetition: as elements are perceived increasingly together they
are connected more strongly
Similarity: stimuli that indicate the same thing will be connected to
each other
Recency: associations that are formed last will be easiest to
remember
Measured via brand awareness tests
After giving a product category cue (e.g. automobiles) the order of

associated brands and the period of time tranpired between the

cue and a named brand is used as a measure for ther strength of
association from product to brand

Brands in Memory: Associative Networks

Old & well-established associations of an element with other

elements create a negative influence on the emergence of new

connections (this is both a strength and weakness for a brand)
Dark side of the picture: think about the associations about Cherry

automobile brand
Try to mentally associate the element of style to the existing network
It takes too much product design & communication effort (time and money) to

place style into the existing network

Bright side of the picture: Brand associations in long term memory cannot

be broken off. The only way this can happen is by developing (and
repeating) new associations and not activating the old ones
The Spa brand (Netherlands) is so strongly associated with mineral water

that competition Sourcy (subbrand of Heineken) cannot accomplish such an

association
Spa protects its memory space in the minds of mineral water consumers

Brands in Memory: Associative Networks

A brand is represented in memory by a relatively small combination of

neurons, which is called the epicenter

Brand Gestalt, on the other hand, is the complete activated associative
network (sights, sounds, taste, smell, usage, thoughts, emotions, all
kinds of experience-based information and commercial messages in
memory)
Activation is spread throughout the network in response to cues
What is activated depends on the type of cue
Which newspapers are you familiar with?
Which newspapers are you familiar with, even if just by name?

In marketing, the brands that appear in our mind spontenously with a

specific cue is called the evoked set

Evoked set is different from the consideration set (strong candidates considered for

purchase)

A flying man: which

athletic shoe brand
comes to mind?

A sweatshop: which
athletic shoe brand
comes to mind?

http://www.metacafe.com/watch/2707445/di
sgusting_dominos_people/

http://www.metacafe.com/watch/2707445/disgusting_dominos_people/
http://www.time.com/time/nation/article/0,8599,1892389,00.html

Brand Meanings:
Cognition & Emotions

Brand Cognition
Consumers connect brand names with associations
Sometimes they are direct associations: Shredded wheat cereal
Sometimes indirect: Perrier mineral water France stylish

Connections with images, sounds, tastes, smells ensure that

the brand has a meaning

Meaning makes it clear what a brand stands for
Volvo stands for safety
Volkswagen stands for reliability

The meaning of a brand may originate from

functional product
Abstract concepts

Brand Cognition
Brand meanings can be broadly classified into ten groups
Brand signs
Provenance & history
Subbrands (brand architecture)
Product-related brand meanings
Situational meanings
Symbolic meanings
Perceived quality
Perceived price
Presentation
Communication

Brand Cognition
Brand signs: visual, auditive, smell, touch, taste traits of the

brand
Logo, spelling
Colour
Design, form
Sound
Smell
The basic function of brand signs is immediate brand identification. It

is essential for the brand to be recognized easily & quickly

(competitors are ever-waiting)
http://www.confectionerynews.com/Markets/Colour-trademarks-apowerful-weapon-in-the-war-of-food-brands

Brand Cognition
Brand origin & subbrands: Country of origin, brand history
Consumers have stereotypical associations with products that come from
various countries, therefore, it is important to find out what degree a
country is associated with a specific product category
Perfume & wine?
Pizza & pasta?
Chocolate?
Electronics?
Automobiles?

Country image influences brand evaluation

Brand Cognition
Country images
Germany: arrogance, order
Sweden: efficiency, modernity
Great Britain: arrogance, tradition
Brazil: style, misery
Italy: style, laziness
Spain: inefficiency, laziness
Switzerlan: wealth, order
Portugal: poverty, backwardness (Anholt, 1998)

A strong manufacturer/company image can be used to endorse

subbrands
(notice the Ko logo?)

Brand Cognition
Product-related brand meanings: The first associations when

activating a brand name are almost always direct associations

with products or products categories
Categorization is required for learning (what is apple cider?)

Consumers associate most brands with physical / functional

product attributes, this is called the product image (not brand

image!)
Ingredients, durability, applications (e.g. Microwaveable), services, etc.

Situational meanings: may be about usage situations (e.g. social

context) & usage moments (moments of the day, season, year,

etc.)

Brand Cognition
Symbolic meanings (from direct / concrete to indirect /

abstract): Consumers allocate human attributes to brands. Two

association categories are proposed
Representations of the users of the brand
Age, gender, social class, occupation & education, lifestyle, personality (macho,
metrosexual, etc.)

Brand personality (will be discussed in following sessions)

Brand Cognition
Perceived quality: Consumers form a subjective image of the

quality of a brand (e.g. very good, bad). It is an abstraction of

higher order and a direct association from the brand
When forming quality image, we use external cues (packaging, price,

WOM, usage experience, etc.). The less experience with the brand the
more external cues used
Perceived quality is the single most important variable that is of influence
to the profitability of companies

Brand Cognition
Presentation: The external appearence (packaging) of a brand

(in totality with shelf display, store design, company branch,

etc) is an important association category
Changing the basic elements of a brands appearence often leads to an

immediate decline of sales

Changes should be made step by step (below the treshold)

http://www.brandchannel.com/features_effect.asp?pf_id=469

Brand Cognition
Communication: Consumers store advertised messages as

advertising associations, which often become associated with

the brand
Advertising associations can be very distinctive, influence the

saliency of a brand, thus influence the purchasing behavior

Brand Emotions
So far, we have limited the discussion on brand choice to the

cognitive aspect of the process. However, this is only half of the

story
A paradigm shift in decision making research
From Descartes to Damasio
There is no distinction between rational and emotional in decision making,
these two systems are very deeply intertwined and both are needed to
make a sound decision
Reactions to external stimuli are always a combination of these two factors
It is an emotional reaction not to step on a snake (does this

reaction makes us irrational because its purely emotional?)

The curious case of Phineas Gage (bad things happen when reason and

emotion do not work together)

Brand Emotions
When we talk about emotions and feelings, we generally use

these two words interchangeably

Emotion
An emotion is essentially an impulse toward an action. E-motion literally

means movement away

Emotions are universal, automated action packages installed in our brains
at birth. They are preprogrammed by evolution to direct our body to act in
response external events
For instance, when an alarm bell sounds our body automatically reacts in
certain ways
Freeze or run
Attention, increased heart rate, adrenalin rush
Body posture
Facial expressions

Brand Emotions
Emotion
If something in the environment changes and it is important for

survival, we experience an emotion to react to the change

This reaction should be fast to cope with the situation. Therefore,

emotions occur very fast and usually remain unconscious (we do not
think about it)
The main fucntion of emotion is attentionning (an important concept in
advertising theory)
Despite scientific controversy, emotions can be groupped as basic
emotions (e.g. fear, anger, joy, surprise, all necessary for survival) and
social emotions (e.g. pride, shame, etc., necessary for social
interactions)

Brand Emotions
Feeling
Feeling (sensation) is the conscious subjective experience of

emotion
We experience a feeling when we become aware of a specific
emotion
Happiness, sadness, envy, etc.
While emotions are measurable responses (e.g. heartbeat,
perspiration, muscular tension) fellings are subjective experiences
(self reported)
In consumer behavior, the term is used as feelings & emotions
Feelings & emotions are deeply rooted in the decision making

machinery, therefore they influence our brand choice decisions

Brand Emotions
The Limbic System (center of emotions)
It is the part of the brain where emotions, motivations, desires and mood

are awakened to steer our behavior

All sensory input that enter the brain (via thalamus) pass through the
limbic system on their way to the cortex
It interacts constantly with the association cortex where thought processes take

place

Sensory input that goes from the senses via the thalamus to the

association cortex is interpreted as emotions in the amygdala (inside the

limbic system)
So, amygdala evaluates the emotional meaning of the outside world
It provides emotional colouring to memories

It is not necessary for marketers to know which parts of the limbic system

does what, but it is necessary to know what the whole system does

Brand Emotions
Why emotions & feelings matter in brand management?
Every sensory perception (e.g. a brand) is coded in memory on the

basis of its cognitive properties (old, young, fast, soft, strong, etc.)
and emotional qualities (pleasurable, unpleasant, sad, happy, etc.)
In general, consumers tend to protect their positive brand emotions

and react negatively to information that conflicts with these emotions

Under constant bombardement of external stimuli (e.g. firms

marketing efforts) consumers have to make choices about which

ones to pay attention or not
The only way for consumers to manage this is to consult stored emotional

associations (emotional memories)

Brand Emotions
It is a complex world for consumers
Average consumer lives in a complicated and information-loaded environment
Furthermore, various goals often conflict and compete for priority in the
decision making process
Due to these major factors consumers never make purely rational
considerations
Feelings as heuristics
In such a complicated marketing environment, consumers use their feelings as
heuristics to make decisions
Heuristic is a short-cut rule for decision making (they save time and energy)
I know this brand! is a universally used heuristic during shopping (that is one of
the reasons why awareness is so crucial in brand management)
How do I feel about X brand? is an emotional heuristic that leads to take it or
leave it behavior

Brand Emotions
Especially in low involvement situations, emotional heuristics play

an important role
High involvement situations require higher cognitive effort and an
extended set of heuristics
Dopamine brands
Dopamine plays a major role in the brain system that is responsible
for reward-driven learning (one of the most addictive substances)
Dopamine flushes the brain with pleasure (happy Pepsi moments,
a shiny diamond ring, a juicy steak, etc.)
Dopamine system is one of the most important system as far as
brand marketing is concerned
A brand that causes more dopamine release when the consumer thinks

about it has great advantages over competition

Brand Emotions
Neuromarketing as a new research tool
Consumers do not know (let alone report) what they feel. These

processes usually occur at the unconscious level

Neuroscience enables researchers to track changes in brain
chemistry & electricity in response to marketing stimuli
Neuroscience evidence suggests that
Emotion (limbic system) overrides reason (frontal lobe) in most

decision making circumstances

We crave for short term (versus long term) rewards
Without emotion there is no memory
Any piece of information without an emotional attachment is lost
Consumers are naturally lazy
Emotions are needed to motivate consumers to focus attaention on
stimuli. Only after than rational brain evaluates brand messages

Brand Emotions
Sensory brand elements such as visuals, jingles, taglines,

odors, etc. are designed to evoke some kind of emotion in

consumers minds
Neuroscience enables researchers to actually see if the
intended emotions are stimulated in the brain
What about mixed emotions? (Good morning Vietnam)
Effects of dramatic contrast on memory & attitude toward the brand

and ad

Brand Emotions
The famous Coke-Pepsi Taste Challenge
Experiment involved testing subjects preferences of Pepsi vs.
Coke with and without brand identification
Without brand: most of the subjects preferred Pepsi. Their shortterm reward centers lighted up due to better (sweeter) taste of
Pepsi
Two cans of Coke (but one labeled as Pepsi): subjects preferred
the can that was labeled as Coke (no such effect occurred when
both cans contained Pepsi)
Subjects frontal and mid brain activity showed strong cognitive and
emotional reactions during branded taste test
Better memory of Coke, and stronger emotional ties to Coke led to
a stronger brand preference that actually overrode taste preference

Brand Emotions

The reptilian brain

http://www.pbs.org/wgbh/pages/frontline/shows/persuaders/
http://www.forbes.com/forbes/2006/0703/044.html