Summary of Marketing Management, 11Ed. Chapter 10

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Philip Kotler, Kevin Lane Keller and Abraham Koshy

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Summary of Marketing Management, 11Ed. Chapter 10

  1. 1. logo copy.tif Brand: A name, term, sign, symbol or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors. Creating Brand Equity Chapter 10 Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha SUMMARY by It is important for the marketer to create a strong brand and maintain customer loyalty. This chapter talks about the concepts of brand and how branding works. We will understand what brand equity is, how it is built and measured as well as the decisions involved in branding strategy. Brand Equity Added value endowed on products and services. Reflected in way consumers think, feel and act with respect to a brand. Customer based brand equity – differential effect brand knowledge has on customer response to the marketing of a brand. Maybe positive or negative depending on how consumers respond. It has three key ingredients – • Brand equity arises from differences in customer response • Differences in response are a result of consumer’s knowledge of the brand. Brand Knowledge consists of all thoughts, feelings, images, experiences, beliefs and so on that become associated with the brand • The differential response is reflected in perceptions, preferences and behaviour related to all aspects of the marketing of the brand Marketer must build a strong brand that ensures that the consumers have the right experiences. Brand Promise Marketer’s vision of what the brand must be and do for the consumers. The true and future value depends on customers, their brand knowledge and their likely response to marketing activity.
  2. 2. Chapter 10 - Creating Brand Equity TrendsBrand Equity Models Brand Asset Valuator It provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. Brand Element: Those trademark able devices that identify and differentiate the brand. Most strong brands employ multiple brand elements. Brand element choice criteria includes 6 main parameters – first three being memorable, meaningful and likable (‘brand building’) and last three being transferable, adaptable and protective (‘defensive’). Up and coming/Niche JetBlue Ikea TiVo Redbull Leaders Google USA Declining Pringles Leaders Nike Kodak AAA Tide New/Undeveloped Blackberry Sephora SAP Brtish Airways Eroded/Commoditized Centrum Entertainment Weekly Wells Fargo Budget Rent-A-Car EnergizedBrandStrength (Differentiation,Relevance,Energy) Brand Structure (Esteem & Knowledge) (E There are the five key components of the model – 1. Differentiation – degree to which a brand is seen as different from others 2. Energy – brand’s sense of momentum 3. Relevance – breadth of brand’s appeal 4. Esteem – how well the brand is regarded and respected 5. Knowledge – how familiar and intimate customers are with the brand Brand Resonance Model Creation of significant brand equity requires reaching the top or pinnacle of the brand pyramid, which occurs only if the right building blocks are put into place. Resonance Judgement Feelings Performance Imagery Salience
  3. 3. • Brand Salience – how often and how easily customers think of the brand under various purchase or consumption situations. • Brand Performance – how well the product or service meets customers’ functional needs • Brand Imagery - describes the extrinsic properties of the product or service; also the way in which brand attempts to meet customers’ psychological or social needs • Brand Judgements – focus on customers’ own personal opinions and evaluations • Brand Feelings – customers’ emotional responses and reactions with respect to the brand • Brand Resonance – nature of the relationship customers have with the brand and the extent to which they feel they’re “in sync” with it Brand Audit – consumer focussed series of procedures to assess the health of the brand, uncover its sources of brand equity and suggest ways to improve and leverage its equity. Brand Valuation – Job of estimating the total financial value of the brand. Devising a Brand Strategy When a firm introduces a new product it has 3 choices – • Develop new brand elements for the new product • Apply some of the existing brand elements (Product is called brand extension) • Use a combination of new and existing brand elements (Maybe called a sub brand) Brand Portfolios Marketers need multiple brands to cater to multiple markets. The reasons for diversifying the brand portfolio - 1. Increasing shelf presence and retailer dependence in the store 2. Attracting customers seeking variety who may otherwise have switched to another brand 3. Increasing internal competition within the firm 4. Yielding economies of scale in advertising, sales, merchandising and physical distribution Customer Equity Sum of lifetime values of all customers. The aim of Customer Relationship Management (CRM) is to produce high customer equity. Chapter 10 - Creating Brand Equity Trends Brand Reinforcement Brand needs to be managed so its value does not depreciate. Brand equity reinforced by marketing actions that consistently convey the meaning of the brand in terms of what it represents and how it makes the products superior. Reinforcing requires innovation and relevance throughout the marketing program.

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