Session 13 MG 220 MBA - 4 Oct 10

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Session 13
MG 220 Marketing Management
MBA 10

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Session 13 MG 220 MBA - 4 Oct 10

  1. 1. Part 4: Building Strong Brands<br />> What is Brand Equity?<br />> Building Brand Equity<br />> Measuring Brand Equity<br />> Discussion on Assignment<br />> Discussion on Term Project<br />Class Presentation | Session 14 | 5 Oct 2010<br />
  2. 2. BRANDS!!!!ALL AROUND US….<br />Class Discussion on what brands are:<br />MG 220 Marketing Management<br />2<br />
  3. 3. What is Brand EquityDefining Brands & Role of Brands<br />What is a brand?<br />AMA definition:<br />“a name, term, sign, symbol ,or design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competitors” <br />Brands identify source<br />Consumer identify products through brands as to which satisfy their needs and which don’t<br />For Companies:<br />Brands simplify product handling | inventory management<br />Legal Protection<br />Brands signal a certain level of quality => predictability of demand for firm<br />Competitors can duplicate manufacturing process, but cannot match impressions created from years of marketing<br />MG 220 Marketing Management<br />3<br />
  4. 4. What is Brand EquityThe scope of Branding<br />Branding is all about creating differences. To brand a product, it is necessary to teach consumers:<br />Who the product is<br />What the product does<br />Why consumers should care<br />Consumers must be convinced that there are meaningful differences among products in a category<br />Branding can be applied virtually anywhere where there is choice. Consider branding:<br />Goods<br />Services<br />Stores<br />Person<br />Place<br />Organization<br />Ideas and so on…<br />MG 220 Marketing Management<br />4<br />
  5. 5. What is Brand EquityDefining Brand Equity<br />Brand Equity is added value endowed to product or service<br />Most important is to see what the brand is for customers<br />Thus the concept of Customer-based brand equity: Differential effect that brand knowledge has on consumer response to the marketing of that brand<br />It can be either positive or negative based on customers reaction<br />Three key components of brand equity:<br />Differences in customer response<br />Brand Knowledge<br />Perceptions, preferences and behavior related<br />Brand Equity as a Bridge<br />Marketing investments in brand-building need to be carefully evaluated<br />Brand knowledge created in this process acts dictates future direction of brand<br />MG 220 Marketing Management<br />5<br />
  6. 6. What is Brand EquityBrand Equity Models<br />1. Brand Asset Valuator (BAV)<br />Developed by Young & Rubicam (Y&R) ad agency<br />Four key pillars of brand equity:<br />Differentiation (how much it is seen different from others)<br />Relevance (breadth of brand’s appeal)<br />Esteem (respect)<br />Knowledge (familiarity of consumers)<br />Differentiation & Relevance: Brand Strength – the future direction<br />Esteem & Knowledge: Brand Stature – report of past performance<br />A power grid is formed to identify brand development<br />New brands (low on all DREK)<br />Strong New brands (high on D than R, but low on EK)<br />Leadership brands (high on all DREK)<br />Declining brands (K highest, then E and low DR)<br />Some examples for BAV model from local brands<br />MG 220 Marketing Management<br />6<br />
  7. 7. What is Brand EquityBrand Equity Models<br />2. Aaker Model<br />Developed by David Aaker<br />Five key categories of brand asset (or liability) are:<br />Brand Loyalty<br />Brand Awareness<br />Perceived Quality<br />Brand Associations<br />Proprietary assets<br />Brand identity is key to building brand equity. Its 4 perspectives are:<br />Brand as product (prod scope, attributes, quality, uses, users, country of origin)<br />Brand as organization (org. attributes, local vs global)<br />Brand as person (brand personality, brand-customer relationships)<br />Brand as symbol (visual imagery/metaphors and brand heritage)<br />Brand identity includes:<br />Core identity – central, timeless essence of brand<br />Extended identity - combination of various brand identity elements organized into meaningful, cohesive groups<br />Some examples for Aaker model<br />MG 220 Marketing Management<br />7<br />
  8. 8. What is Brand EquityBrand Equity Models<br />3. BRANDZ<br />Developed by Market Research consultants Millward Brown and WPP<br />Brand building is a process of sequential steps each completed after the other:<br />Presence – Do I know about it?<br />Relevance – Does it offer me something?<br />Performance – Can it deliver?<br />Advantage – Does it offer something different than others?<br />Bonding – Nothing else beats it<br />Bonded consumers are loyal and spend more but are less in numbers<br />4. BRAND RESONANCE<br />Also in sequential steps<br />Identity: Ensuring brand’s identification with specific product/category<br />Meaning: Firmly establishing totality of brand meaning in minds<br />Response: eliciting proper customer response<br />Relationships: converting responses into relationships<br />Brand building blocks:<br />Brand salience (how often and easily brand is though about in purchase)<br />Brand performance (how brand meets customer needs)<br />Brand imagery (how brand meets psych. and social needs)<br />Brand judgments (consumer’s own personal opinion and judgments)<br />Brand feelings (customer’s emotional responses and reaction)<br />Brand resonance (extent to which customers are in synch)<br />MG 220 Marketing Management<br />8<br />
  9. 9. What is Brand EquityBrand Equity Models<br />Brand resonance pyramid helps identify psychological bond consumers have with the brand<br />MG 220 Marketing Management<br />9<br />
  10. 10. What is Brand EquityBuilding Brand Equity<br />Process of building brand equity is:<br />Initial choices for brand elements or identities that make a brand<br />Product and services and all accompanying marketing activities and supporting marketing programs<br />Other associations by linking it to some other entity<br />1. Choosing Brand Elements<br />Trademark elements which are used to identify and differentiate brand<br />Brand element choice criteria<br />Developing Brand Elements – through strong research and understanding of consumer preferences and perceptions<br />MG 220 Marketing Management<br />10<br />
  11. 11. What is Brand EquityBuilding Brand Equity<br />2. Developing Holistic Marketing Activities<br />Brands are not built by advertising alone<br />Range of contacts and touchpoints are used<br />Brand contact is an information-bearing experience a customer or prospect has with the brand, the product category or the market that relates to the marketer’s product or services<br />Three important themes in marketing activities for brand development are:<br />Personalization<br />Making it as relevant to consumers<br />Integration<br />Mixing and matching marketing activities<br />Brand awareness is consumers’ ability to identify brand under different circumstances<br />Brand image is perception and belief held by consumer as reflected in associations held in memory<br />Internalization<br />Ensuring that employees also ‘live the brand’<br />B2E – Business to Employees<br />MG 220 Marketing Management<br />11<br />
  12. 12. What is Brand EquityBuilding Brand Equity<br />3. Leveraging Secondary Associations<br />Brands associations may be linked further to other entities having their own associations thus creating ‘secondary associations’<br />This is an important way of building brand equity by ‘borrowing it’<br />MG 220 Marketing Management<br />12<br />
  13. 13. What is Brand EquityMeasuring Brand Equity<br />Indirect approach – assessing potential sources of brand equity by identifying consumer’s brand knowledge structures<br />Direct approach – actual impact of brand knowledge on consumer’s response to different aspect of marketing<br />Important for marketers:<br />Identify sources of brand equity – Brand audits<br />How these sources and outcomes change, if at all over time – Brand tracking<br />Brand audits<br />Consumer-focused exercise<br />Involving series of procedures to assess health of brand and uncover its sources of brand equity and suggest ways to improve and leverage its equity<br />Brand tracking<br />Information collection to understand the performance of brands<br />Generally use quantitative measures<br />Brand Valuation<br />Putting a financial value to brand<br />May even be shown in balance sheet!<br />MG 220 Marketing Management<br />13<br />
  14. 14. Part 4: Building Strong Brands<br />> Managing Brand Equity<br />> Devising a Branding Strategy<br />> Developing & Communicating a Positioning Strategy<br />> Differentiation Strategies<br />> Product Life-Cycle Marketing Strategies<br />> Quiz 4 (Part 3: Chap 7 & 8)<br />Class Presentation | Session 14 | 7 Oct 2010<br />
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