Marketing Management By Philip, Kevin Lane Keller, Abraham Koshy, Mithileshwar Jha logo copy.tif SUMMARY by Chapter 10 Creating Brand Equity 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:A name, term, sign, Brand Equity Added value endowed on products and services. Reflected in way consumers think, feel andsymbol or design, or a act with respect to a brand. Customer based brand equity – differential effect brandcombination of them, knowledge has on customer response to the marketing of a brand. Maybe positive orintended to identify negative depending on how consumers respond. It has three key ingredients – • Brand equity arises from differences in customer responsethe goods or services • Differences in response are a result of consumer’s knowledge of the brand. Brandof one seller or group Knowledge consists of all thoughts, feelings, images, experiences, beliefs and so on thatof sellers and to become associated with the branddifferentiate them • The differential response is reflected in perceptions, preferences and behaviour relatedfrom those of to all aspects of the marketing of the brand Marketer must build a strong brand that ensures that the consumers have the rightcompetitors. 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.
Chapter 10 - Creating Brand Equity Trends Brand Equity Models Brand Asset Valuator It provides comparative measures of the brand equity of thousands of brands across hundreds of different categories. Leaders Up and coming/Niche Google (Differentiation, Relevance, Energy)Brand JetBlue USA Pringles Declining Leaders Energized Brand Strength Ikea Nike KodakElement: TiVo Redbull AAA TideThose trademark abledevices that identify New/Undeveloped Eroded/Commoditizedand differentiate the Blackberry Centrumbrand. Most strong Sephora Entertainment Weeklybrands employ SAP Wells Fargo Brtish Airways Budget Rent-A-Carmultiple brandelements. Brandelement choice Brand Structure (Esteem & Knowledge)criteria includes 6 (E There are the five key components of the model –main parameters – 1. Differentiation – degree to which a brand is seen as different from othersfirst three being 2. Energy – brand’s sense of momentummemorable, 3. Relevance – breadth of brand’s appeal 4. Esteem – how well the brand is regarded and respectedmeaningful and 5. Knowledge – how familiar and intimate customers are with the brandlikable (‘brandbuilding’) and last Brand Resonance Modelthree being Creation of significant brand equity requires reaching the top or pinnacle of the brandtransferable, pyramid, which occurs only if the right building blocks are put into place.adaptable andprotective(‘defensive’). Resonance Judgement Feelings Performance Imagery Salience
Chapter 10 - Creating Brand Equity • Trends 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 evaluationsBrand • Brand Feelings – customers’ emotional responses and reactions with respect to the brandReinforcement • Brand Resonance – nature of the relationship customers have with the brand and the extent to which they feel they’re “in sync” with itBrand needs to be Brand Audit – consumer focussed series of procedures to assess the health of themanaged so its value brand, uncover its sources of brand equity and suggest ways to improve and leverage itsdoes not depreciate. equity.Brand equityreinforced by Brand Valuation – Job of estimating the total financial value of the brand.marketing actions thatconsistently convey the Devising a Brand Strategymeaning of the brand When a firm introduces a new product it has 3 choices –in terms of what it • Develop new brand elements for the new productrepresents and how it • 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)makes the productssuperior. Reinforcingrequires innovation Brand Portfolios Marketers need multiple brands to cater to multiple markets. The reasons for diversifyingand relevance the brand portfolio -throughout the 1. Increasing shelf presence and retailer dependence in the storemarketing program. 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.