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  • 2. The Concept of Customer-Based Brand Equity Customer-based brand equity  Differential effect  Customer brand knowledge  Customer response to brand marketing  2
  • 3. Building Customer-Based Brand Equity The initial choices for the brand elements  Brand name, logo, symbol, character, slogan….  Marketing and other activities and  supporting marketing programs Products, services, communications, channels ….  Other associations indirectly transferred  to the brand by linking it to some other entities Other companies, brands, places, people ….  3
  • 4. Benefits of Customer-Based Brand Equity Enjoy greater brand loyalty & be less vulnerable  to competitive marketing actions Command larger margins & have more inelastic  responses to price increases and elastic responses to price decreases Receive greater trade cooperation & support  Increase marketing communication  effectiveness Yield licensing opportunities  Support brand extensions  Bridge between past activities and future  direction 4
  • 5. Three Tools to Facilitate Brand Planning Holistic marketing requires careful planning  and implementation. To help guide these efforts, three models of  increasing scope are presented: 1) brand positioning model describes how to guide integrated marketing to maximize competitive advantages; 2) brand resonance model describes how to create intense, activity loyalty relationships with customers; and 3) brand value chain model describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments. 5
  • 6. 1. Brand Positioning Model Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002),  “Three Questions You Need to Ask About Your Brand,” Harvard Business Review, September, 80 (9), 80-89. 6
  • 7. Brand Positioning Brand positioning is about how we want target  customers to think about a brand with respect to competitors A strong brand positioning helps guide  organizational activities by clarifying the brand’s essence, what the brand helps the customer achieve, and how it is unique in doing so Everyone in the organization should understand the brand  positioning and use it as context for making decisions 7
  • 8. Classic Brand Positioning Statement To ___________________________________________________________________, (Target Group/Need) _______________is the brand of __________________________________________. (Brand) Frame of Reference (Perceptual) Competing Mainly With ___________________________________________________ Frame of Reference (Competitive) that ___________________________________________________________________, (Relevant Differentiating Benefit) because ______________________________________________________________. (Reason To Believe) The Brand Character is: ___________________________________________________
  • 9. Positioning For the young at heart who value an infinite amount of choices, is the virtual cookie jar, competing mainly with all brick and mortar stores, that gives you the perfect combination of convenience, service, selection and price, because offers a truly global selection of products. Brand Character: Simple, Friendly, Empowering 9
  • 10. Problems with Classical Positioning Statement Ignores possibility of multiple  points-of-difference Assumes only 1 key point-of-difference  Ignores need for points-of-parity  Doesn’t provide forward-looking  growth platform 10
  • 11. The Four Components of a Superior Competitive Positioning Competitive frames of reference  Nature of competition  Target market  Develop unique brand points-of-difference (POD’s)  Desirable to consumer  Deliverable by the brand  Differentiating from competitors  Establish shared brand points-of-parity (POP’s)  Negate competitor points-of-difference  Demonstrate category credentials  Brand mantras  Short 3-to-5 word phrases that capture key POD’s & the irrefutable  essence or spirit of the brand. 11
  • 12. Coca-Cola Positioning Competitive frame of  reference Colas?  Non-alcoholic?  Points-of-difference  Distinctive taste profile  Optimistic view of life  Classic, iconic symbolism &  imagery Points-of-parity  Contemporary, up-to-date  Refreshing flavor  Brand slogan  “Coke Side of Life”  12
  • 13. Identifying & Choosing POP’s & POD’s Desirable? (consumer perspective)  Personally relevant  Believable & credible  Deliverable? (firm perspective)  Feasible  Profitable  Pre-emptive, defensible & difficult to attack  Differentiating? (competitive perspective)  Distinctive & superior  13
  • 14. Identifying & Choosing POP’s & POD’s 14
  • 15. Principles Reinforced By Miller Lite Launch Both points-of-parity and points-of-difference  are needed to be well-positioned Points-of-parity and points-of-difference are  often negatively correlated Points-of-parity are NOT points-of-equality –  there is a zone or range of indifference or tolerance Points-of-parity may even need to be the  focus of marketing communications as the points-of-difference may be a “given” 15
  • 16. Miller Lite Update Miller Lite had experienced flagging sales,  falling behind both Bud Lite and Coors Lite Management decides to create a powerful  new position … Reaffirm core duality and functional benefit of less filling  & great tasting Reinforce strong user imagery and emotional appeal as to  uncompromising character By addressing inherent product trade-offs  and linking performance & emotional equities … Sales rise 10% during 2004-2005  16
  • 17. Accenture Straddle Positioning Strategy Accenture is the company that combines:  Strategic insight, vision, and thought leadership  Information technology expertise in developing client  solutions This strategy permits:  Points-of parity with its two main competitors, McKinsey &  IBM While simultaneously achieving points-of-difference  17
  • 18. Accenture Strategy Straddle Positioning & Vision (WHAT they do) Technology & Execution
  • 19. Accenture Straddle Positioning McKinsey IBM Strategy POP POD & Vision Technology & POD POP Execution
  • 20. Accenture Proactive, Agile, Straddle Positioning & Passionate (HOW they do it) Approachable & Collaborative
  • 21. Accenture Straddle Positioning McKinsey IBM Proactive, Agile, POP POD & Passionate Approachable POD POP & Collaborative
  • 22. Accenture High Performance. Delivered. 22
  • 23. Communicating & Establishing POP’s & POD’s Create POP’s and POD’s in the face of  attribute & benefit trade-offs Price & quality  Convenience & quality  Taste & low calories  Efficacy & mildness  Power & safety  Ubiquity & prestige  Comprehensiveness (variety) & simplicity  Strength & refinement  23
  • 24. Strategies to Reconcile Attribute & Benefit Trade-Offs Design optimal product & services  Establish separate marketing  programs Leverage secondary association (e.g.,  co-brand) Re-define the relationship from  negative to positive 24
  • 25. Brand Mantras Short 3-to-5 word phrases that capture the  irrefutable essence or spirit of the brand. Brand mantra must clearly delineate what  the brand is supposed to represent and therefore, at least implicitly, what it is not Brand mantras typically are designed to  capture the brand’s points-of-difference, i.e., what is unique about the brand. 25
  • 26. Brand Mantra Examples Nike  “Authentic Athletic  Performance” Disney  “Fun Family  Entertainment” American Express  “Worldclass Service,  Personal Recognition” 26
  • 27. Brand Mantra Criteria Communicate  A good brand mantra should define the category (or  categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the brand. Simplify  An effective brand mantra should be memorable. As a  result, it should be short, crisp, and vivid in meaning. Inspire  Ideally, the brand mantra would also stake out ground that  is personally meaningful and relevant to as many employees as possible. 27
  • 28. Some Positioning Guidelines 1. A good positioning has … • A “foot in the present” & • A “foot in the future” 2. Evaluate POP & PODs according to: • Desirable (consumer) • Deliverable (company) • Differentiating (competition) 3. Identify crucial POP’s • Role play competitor’s positioning • Surface & resolve potential consumer trade-offs • Assess negative correlations & decision-making styles 4. Ensure duality • Rational (“Head”) • Emotional (“Heart”) 28
  • 29. 2. Brand Resonance Model Kevin Lane Keller (2001), “Building Customer-Based Brand  Equity: A Blueprint for Creating Strong Brands,” Marketing Management, July/August, 15-19. 29
  • 30. Create Brand Resonance with Customers Challenge is to ensure customers have  the right types of experiences to create the right brand knowledge Building a strong brand involves a series  of steps as part of a “branding ladder” A strong brand is also characterized by  a logically constructed set of brand “building blocks.” 30
  • 31. BRAND RESONANCE PYRAMID Branding Stages of Brand Building Blocks Objective at Development Each Stage RELATIONSHIPS: Intense, 4 What about you & me? Active Loyalty Resonance RESPONSE: Positive, 3 What about you? Accessible Judgments Feelings Reactions MEANING: Points-of-Parity 2 What are you? & Difference Performance Imagery Deep, Broad IDENTITY: 1 Brand Who are you? Salience Awareness
  • 32. Brand Resonance Pyramid Terminology Salience  Depth and breadth of brand awareness  Recognition and recall at purchase and consumption  Performance  What the brand does to meet customers' more functional needs.  Brand performance refers to the intrinsic properties of the brand in terms of  inherent product benefits. Imagery  How people think about a brand abstractly rather than what they  think the brand actually physically does. Brand imagery is thus more extrinsic properties of the brand.  Four important intangible dimensions are:  Type of user  Brand personality  History & heritage  Experiences  32
  • 33. Brand Resonance Pyramid Terminology Judgments  Customers overall brand evaluations  How customers combine performance and imagery  associations to form different kinds of brand opinions Feelings  Customers emotional responses and  reactions to the brand Can be mild or intense; positive or negative; or  experiential or enduring in nature. Can also relate to the social currency evoked by the  brand. 33
  • 34. Dimensions of Brand Feelings Brand feelings can be divided into two broad categories:  Experiential – immediate, short-lived during purchase/consumption  Enduring – private, possibly part of day-to-day life Brands should have one, or ideally both, types of feelings Experiential Feelings Enduring Feelings • Warm • Sense of Security (Inner-directed) Increasing • Fun • Social Approval (Outer-directed) level of intensity • Exciting • Self-Respect (Actualization) Self-Respect Higher level of values & Sense of Security Social Approval needs Inner-Directed Outer-Directed
  • 35. Brand Resonance Pyramid Terminology Resonance  The extent to which customers feel that  they are “in synch” with the brand Intensity or depth of the psychological bond that  customers have with the brand Level of activity engendered by this loyalty  Repeat purchase rates  The extent to which customers seek out brand information,  events, or other loyal customers Etc.  35
  • 37. Brand Resonance Model: Brand Building Implications 1. Customers own brands 2. Don’t take shortcuts with brands 3. Brands should have a duality • Performance & imagery • Judgments & feelings 4. Brand should have a richness 5. Brand resonance provides important focus 37
  • 38. 3. Brand Value Chain Model Kevin Lane Keller and Don Lehmann (2003), “How Do  Brands Create Value,” Marketing Management, May/June, 26-31. 38
  • 39. Brand Value Chain Marketing Customer Market Shareholder VALUE Program Mindset Performance Value STAGES Investment - Price premiums - Product - Awareness - Stock price - Price elasticities - Communications - Associations - P/E ratio - Market share - Trade - Attitudes - Market capitalization - Expansion success - Employee - Attachment - Cost savings - Other - Activity - Profitability Program Investor Marketplace MULTIPLIERS Quality Sentiment Conditions - Relevance - Competitive reactions - Market dynamics - Distinctiveness - Channel support - Growth potential - Consistency - Customer size and profile - Risk profile - Cohesiveness - Brand contribution
  • 40. Conclusions Three helpful brand planning models are:  Competitive brand positioning model  Points-of-parity & points-of-difference  Brand resonance model  Six building blocks: Salience, Performance, Imagery,  Judgments, Feelings, & Resonance Brand Value Chain  Value stages & multipliers  These models can be used …  Qualitatively to guide & interpret possible marketing  actions Quantitatively to measure marketing effects  40