Brand Management

Week 02

The Brand Equity Concept

No common viewpoint on how it should be conceptualized and measured It stresses the importance of brand role in marketing strategies. Brand equity is defined in terms of the marketing effects uniquely attributable to the brand.
Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.

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Strategic Brand Management

It involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity. The Strategic Brand Management Process is defined as involving 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

Strategic Brand Management Process

Steps
Identify and establish brand positioning and values

Key Concepts
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

Plan and implement brand marketing programs

Measure and interpret brand performance

Grow and sustain brand equity

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 Stage 1: Identifying and establishing brand positioning and values

Brand positioning Chapter 3 Core Brand Values set of abstract associations (benefits and attributes) that characterize a brand. Brand Mantra short three-to-five word expression of the most important aspects of the brand and its core brand values. 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 improve and 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

 BRAND BUILDING TOOLS AND OBJECTIVES

Choosing Brand Elements
Brand Name Logo Symbol Character Packaging Slogan
memorability meaningfulness likebility transferability adaptability protectibility

Developing Marketing Programs

Product --- Tangible and Intangible benefits Price --- Value perceptions Distribution Channels --- Integrate push and pull Communications --- Mix and match options Company Country of origin Channel of distribution Other brands Endorser Event

Leverage of Secondary Associations

awareness meaningfulness transferability

 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

 BRANDING BENEFITS
Possible Outcomes
Greater Loyalty Less vulnerability to competitive marketing actions and crises Larger margins More elastic response to price decreases More inelastic response to price increases Greater trade cooperation and support Increased marketing communication efficiency and effectiveness Possible licensing opportunities More favorable brand extension evaluations

CHAPTER 2: CUSTOMER-BASED BRAND EQUITY

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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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Customer-Based Brand Equity

Differential effect
Differences in consumer response

Brand knowledge
A result of consumers knowledge about the brand

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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Brand Equity as a Bridge

Reflection of past investments in the marketing of a brand Direction for future marketing actions or programs

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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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Sources of Brand Equity

Brand awareness
Brand recognition Brand recall

Brand image
Strong, favorable, and unique brand associations

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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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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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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 adequately accounting for them in designing communication strategies.
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The Four Steps of Brand Building

1. Ensure identification of the brand with customers and an association of the brand in customers minds 2. Establish the totality of brand meaning in the minds of consumers 3. 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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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 feel about 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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Customer-Based Brand Equity Pyramid

4. RELATIONSHIPS = RESONANCE What about you and me?

3. RESPONSE = JUDGMENTS FEELINGS

What about you?

2. MEANING = PERFORMANCE IMAGERY What are you?

SALIENCE
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1. IDENTITY =

Who are you?

Sub-Dimensions of CBBE Pyramid

LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT

QUALITY CREDIBILITY CONSIDERATION SUPERIORITY

WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT

PRIMARY CHARACTERISTICS & SECONDARY FEATURES PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY SERVICE EFFECTIVENESS, EFFICIENCY & EMPATHY STYLE AND DESIGN PRICE

USER PROFILES PURCHASE & USAGE SITUATIONS PERSONALITY & VALUES HISTORY, HERITAGE & EXPERIENCES

CATEGORY IDENTIFICATION NEEDS SATISFIED

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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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-mind and have sufficient mind share, but it must also do so at the right times and places.

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Product Category Structure

To fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory.

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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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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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Judgment Dimensions
Brand quality
Value Satisfaction

Brand consideration
Relevance

Brand credibility
Expertise Trustworthiness Likeability

Brand superiority
Differentiation

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Feelings Dimensions
Warmth Fun Excitement Security Social Approval Self-respect

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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

ConsumerBrand Resonance
INTENSE, ACTIVE LOYALTY

Consumer Judgments

Consumer Feelings

RATIONAL & EMOTIONAL REACTIONS

Brand Performance

Brand Imagery

POINTS-OFPARITY & POINTS-OFDIFFERENCE

Brand Salience

DEEP, BROAD BRAND AWARENESS

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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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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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 and learning from the results?
Sources: Larry Selden and Geoffrey Colvin, 2004.
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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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Customer Equity
Blattberg and Deighton (1996) offer eight guidelines as a means 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 customer equity 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 two marketing organizationsfor acquisition and retention efforts

2.35

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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Relationship of Customer Equity to Brand Equity

Customers drive the success of brands but brands are the necessary touchpoint that firms have to connect with their customers. Customer-based brand equity maintains that brands create value by eliciting differential customer response to marketing activities. The higher price premiums and increased levels of loyalty engendered by brands generate incremental cash flows.
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