2. Customer-Based Brand Equity
CBBE Model: incorporates theoretical advances and
managerial practices in understanding and influencing
consumer behavior.
Aka: understanding the needs or wants of the customer
3. CBBE Basic Premise
The power of a brand lies in what consumers have learned,
felt, seen, and heard about the brand as a result of their
experiences.
4. 3 Ingredients to CBBE Model
Differential effect
Brand Knowledge
Consumer response to marketing
5. Differential Effect
Brand equity arises from differences in consumer
response
No differences = Commodity
If a commodity, competition becomes based on price
Examples: Who has the better french fries? McDonalds or
Burger King?
6. Brand Knowledge
Drives brand equity
Associative network memory model: views memory as a
network of nodes and links, in which nodes represent
stored information or concepts
Knowledge about the brand changes the consumer’s
perception of the brand
For example: Apple
7. Brand Knowledge cont.
Can be characterized in terms of 2 components:
Brand awareness: strength of the brand node or trace in
memory; ability to identify brand under different conditions
Brand image: perceptions about a brand held in consumer’s
memory
Examples: Apple user friendly, creative, iPhone, iPad
Class activity
8. What is the association that comes to
mind with these brands?
9. What is the association that comes to
mind with these brands?
10. What is the association that comes to
mind with these brands?
11. What is the association that comes to
mind with these brands?
12. What is the association that comes to
mind with these brands?
13. Consumer Response to
Marketing
How does a company’s marketing techniques effect the
consumer?
What kind of feelings are stirred in their marketing
techniques?
14. Sources of Brand Equity
Reminder: CBBE occurs when the consumer has a high
level of awareness and familiarity with the brand and
holds in their memory some strong, favorable, and unique
brand associations
Key to Branding: Consumers must not think that all brands
in the category are the same!
15. Brand Awareness
Brand recognition: relates to customers’ ability to confirm
exposure to the brand when given the brand as a cue
Can consumers correctly identify a brand?
If a consumer is aware of a specific brand, it is put into a
“consideration set”.
Sometimes if a consumer is only aware of one brand of a
certain product or service, they will only consider that one
brand
Class question: Is there a specific brand you always choose
because it’s the only brand you are aware of? For example:
medicine
16. 3 main reasons brand awareness is
important in consumer behavior:
Learning advantages
Creation of a brand image brand node has been
established in memory
Consideration advantages
Increase of brand awareness, increase of consideration set
Choice advantages
Brand awareness increases association even if there isn’t
any other associations to those brands
When consumers have low involvement in purchasing
decisions, they will choose the brand they are most aware of
17. Brand awareness cont.
Develop a slogan, jingle, or ad that creatively pairs the
brand and the appropriate category
Video:
https://www.youtube.com/watch?v=VBAwXN8lS88
18. Brand Image
Ways brand associations can be created:
Direct experience
Information communication
Word of mouth
Assumptions from the brand itself
Identification of the brand with a company, country,
channel of distribution, particular person, particular
place, and particular event
19. Brand image cont.
Word of mouth is very important for restaurants,
entertainment, banking, and personal services
See Figure 2.4 page 63
Favorable brand associations: created by convincing
consumers that the brand possesses attributes and
benefits that satisfy their needs and wants
20. Brand Desirability
Depends on three factors:
How relevant consumers find the brand
association
How distinctive consumers find the brand
association
How believable consumers find the brand
association
21. Deliverability
Creating a favorable association also requires that the
firm be able to deliver on the desired association
What would be the cost or investment necessary and the
length of time involved to create or change the desired
association?
Depends on 3 factors:
The actual or potential ability of the product to perform
The prospects of communicating that performance
The sustainability of the actual and communicated
performance over time
22. 4 Steps to Building a Brand
1. Identify the brand with customers and associate the brand in
customers’ minds with a specific product class or customer
need
Who are you?
2. Establish the totality of brand meaning in the minds of
customers by strategically linking a host of tangible and
intangible brand associations with certain properties
What are you?
3. Elicit the proper customer responses to this brand identification
and brand meaning
What about you? What do I think or feel about you?
4. Convert brand response to create an intense, active loyal
relationship between customers and the brand
What about you and me? What kind of association and how much of
a connection would I like to have with you?
24. Breadth and depth of awareness
Breadth: the range of purchase and usage situations in
which the brand element comes to mind
Depth: the likelihood that a brand element will come to
mind and the ease with which it does so
25. Brand Performance
Ways a brand tries to meet needs
5 important types of attributes and benefits that often
underlie brand performance:
Primary ingredients and supplementary features
Product reliability, durability, and serviceability
Service effectiveness, efficiency and empathy
Style and design
Price
26. Brand Imagery
Extrinsic properties of the product or service, including
the ways in which it attempts to meet customer’s
psychological or social needs
Customers will be targeted demographically and
psychographically
27. Brand Personality
Personality traits can be shown through product
animation techniques or celebrities used in ads
Tone is important
Personality needs to be consistent with the brand
Watch ad here
https://www.youtube.com/watch?v=kPK8B7IiHTo
What kind of personality is CoverGirl trying to portray?
28. Brand Judgements
Focus on customers’ personal opinions and evaluations
In terms of creating a strong brand, four types of
summary brand judgments are particularly important:
Quality
Credibility
Consideration
Superiority
29. Brand Feelings
What emotions are evoked when the consumer sees the
brand?
Is there…
Warmth
Fun
Excitement
Security
Social approval
Self-respect
30. Brand Resonance
Intensity or psychological depth/bond with the brand
Behavioral loyalty
Attitudinal attachment
Sense of community
See Harley Davidson Video:
https://www.youtube.com/watch?v=iOF7aAVZMqA
Active engagement
31. Brand Salience
Relates to aspects of the awareness of the brand
How often and easily is the brand evoked under various
situations or circumstances
To what extent is the brand easily recalled or
recognized?
Brand awareness is more than just recognizing the
company! Watch this video
https://www.youtube.com/watch?v=L7iLi76BcCc
32. Creating Customer Value
Customer-brand relationships are the foundation of
brand resonance and building a strong brand.
CBBE model: Power of a brand resides in the minds of
consumers and customers.
Achieve Customer Value by Putting Customers First
33. Creating Customer Value
Putting Customers First
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?
34. Case Study
Had a remarkable revival in the 1990s
with 50% growth for 7 years
Turn of the century took a turn for the
worst.
2005: Stagnant Sales & losing money
in US market
Culprit? CEO says VW was not
customer-focused
Focused too much on technology
advancement
« How does it help the customer and
will the customer pay for it? »
35. Case Study
Google Glass
Google announced in
January that Glass would
be going away “as we
know it.”
Hyped up product
Time Magazine named it
one of the “Best
Inventions of the Year”
Comedic Punch Line: The
Simpsons, Saturday Night
Live, The Colbert Report.
Tumblr account
“White Men Wearing
Google Glass”
36. The Marketing Advantages of Strong
Brands
Greater loyalty and less vulnerability to competitive
marketing
Larger margins
Greater trade co-operation and support
Increased marketing communication effectiveness
Licensing opportunities
Additional brand extension opportunities
38. Things to Remember:
Customer-based brand equity has 3 ingredients:
Differential effect
Brand knowledge
Consumer response to marketing
The power of a brand lies in what the consumers have
experienced with your brand!
Good brand positioning helps guide your marketing
strategy.
40. Identifying and Establishing Brand
Positioning
“The heart of the marketing strategy”
Brand Positioning: the act of designing the company’s
offer and image so that it occupies a distinct and valued
place in the target customer’s mind.
Good brand positioning helps guide marketing strategy
42. “upscale homeless person, who has a slight degree
of angst and is probably in the life stage of 18 to 26”
From traditional homes and advantage, but this
offers them the benefit of rebellion
The Urban shopper “leads a pretty cloistered
existence.”
“Although they deem themselves worldly, they
believe the way they see things personally is the
correct way and everyone else feels exactly the
same way.”
43. “…Probably when they were little, they saw the older kids
do something they thought was really cool, and they
weren’t allowed to do it and now that they’re adults, it’s
sort of like ice cream for breakfast, they can do whatever
they want now. They’re out on their own, independent.
So one thing that actually Urban Outfitters is selling now is
Beavis and Butthead tees, which sort of surprised me
because I was no fan of it, but maybe I was little bit older
then, but that was in 1992 … They undoubtedly probably
don’t know anything about Beavis and Butthead but
simply remember that being something the older cool
kids did and something, clearly, they were denied.”
Urban Outfitters Executive Director Sue Otto
44. The Anthropologie customer is a bit more polished, a bit more older
and she has much less angst … She tends to be a homeowner and she
tends to be in a relationship and more likely than not, married with
children.”
We say that this is the customer you want to have at a dinner table.
She’s an optimist. She’s aware of what’s going on in the world, but she
chooses to focus on the positives, not the negatives … She shops at
J.Crew, she shops at Nordstrom, she shops at boutiques … She may go
to Banana Republic for a basic pant, but she’s not buying her wardrobe
there. She’s not shopping at Ann Taylor. She’s certainly not shopping at
Chico’s.”
The Anthropologie customer is dressing for respectability in her
community, with her friends and family.”
45. “The Free People customer is happy. She loves life. She is
independent yet loves being with her friends, her family,
and her mate. She travels every spring to festivals,
Coachella and Wanderlust being her favorite. She runs and
practices yoga to stay fit and balanced. She is influenced
by fashion but yet seeks inspiration from all over the world
to put together a look that is her own. She is a mix of sweet,
cool, and boho and everything in between. We target age
26…” — Meg Hayne, Free People president
48. Nature of Competition
Deciding to target a certain type of consumer defines
the nature of competition because certain other firms
have also decided to target that segment or consumers
in that segment may already look to certain brands.
Some products and brands are likely to be seen as close
substitutes
49. Points of Difference associations
Points of difference are strong, favorable and unique
associations for a brand
They may be based on almost any type of attribute or
benefit association that consumers strongly associate
with a brand, positively evaluate and believe that they
could not find to the same extent with a competitive
brand.
Gives consumers a compelling reason to buy a product
that competitors could not match
50. Points of Parity associations
Associations that may be shared with other brands
2 forms: category and competitive
Category points of parity: associations that consumers view
as being necessary
Competitive points of parity: associations designed to
negate competitor’s point of difference
If a brand can ‘break even’ in areas where its competitors
are trying to find an advantage and can achieve
advantages in some other areas, the brand should be in a
strong position.
51. Points of Parity vs. Points of Difference
Points of parity are usually easier to achieve because
they’re more basic
Points of difference are what demonstrates a brand’s
superiority
Which is more important?
52. Positioning Guidelines
Guided by points of difference and points of parity
Two Issues
Defining and communicating the competitive frame of
reference
Choosing and establishing points of parity and points of
difference
53. Defining and Communicating the
Competitive Frame of Reference
Determine category membership
Products that the brand competes with
Helps make customers aware of that brand’s products
Customer awareness must happen before they will look at the
POD’s and POP’s
Some companies straddle two frames – BMW
Three ways to convey category membership
1. Communicate category benefits – product attributes and
POP’s
2. Compare with Exemplars
3. Relying on Product Descriptors – convey category origin
54. Choosing Points of Parity and Points
of Difference
Consumers must find POD’s desirable and believe the
firm can deliver them
Criteria of desirability
1. Relevance
2. Distinctiveness
3. Believability
Criteria of Deliverability
1. Feasibility – product performs at stated level
2. Communicability – create and strengthen desired
associations
3. Sustainability – performance over time
55. Establishing Points of Parity and Points
of Difference
Attributes of POP’s are negatively correlated with
attributes of POD’s
How to deal with negative correlation:
1. Separate the attributes – two marketing campaigns
2. Exploit Equity of Another Entity – link brand to a person,
other brand, or event and steal equity
3. Redefine the relationship – convince consumers they are
positively correlated
https://m.youtube.com/watch?v=0nBxcMImubk
56. Updating Positioning Over Time
Two Issues
Laddering – how to deepen brand and tap into core brand associations
Maslow’s Hierarchy
Means end chain: attributes lead to benefits, which lead to values
When brands become associated with more products they move up the product
hierarchy
Reacting – how to respond to competitive challenges that threaten the brand’s
current position
Competitors take actions to eliminate POD’s and make the POP’s or establish new
POD’s
Three options when this happens:
1. Do nothing – if competitive actions are unlikely to capture the POD
2. Go on defense – strengthen your POD’s and POP’s
3. Go on offensive – reposition your brand by launching a product extension
57. Defining and Establishing Brand
Mantras
Brands span product categories and have several
positionings
Want to establish a relationship between core brand
associations and the brand mantra
Core Brand Associations
Attributes and benefits that charactereize the 5-10 most
important aspects of the brand
Mental maps
Starbucks Example
58.
59. Brand Mantras
State the core brand promise/essence in 3-5 words
Helps internal employees and external marketing partners
understand what the brand represents to the consumer so they
can adjust their own strategies
Three terms of mantras
1. Function – nature of product and benefits it will provide
2. Descriptive modifier – describe nature of the business function –
Nike
3. Emotional modifier – how the brand provides benefits – Disney
No other brand should excel in all areas of another brand’s mantra
Only captures POD’s – reinforce POP’s another way
Helps determine which categories the brand should extend to
60. Implementing a Brand Mantra
Should develop mantra at the same time positioning is
determined
When creating a mantra consider:
Communicate – mantra should define the brand category and
the uniqueness of the brand
Simplify – mantras should be short and memorable
Inspire – relevant to employees
The brand position is directly related to creating a strong
brand
Want internal staff members to participate in branding
More motivated to serve and attract customers, which
increases the overall brand equity
61. Things to Remember:
Strong brands exhibit more points of difference
Your brand mantra should correlate with your core brand
associations!
Achieve customer value by putting customers first!