2. Chapter 1 Brands and Brand Management
What Is a
Brand?
• Brand Elements
• Brands versus
Products
Why Do Brands
Matter?
• Consumers
• Source
Identification
• Risk reducer
• Search cost reducer
• Promise, bond, or
pact with maker of
product
• Symbolic device
• Signal of quality
• Firms
• Means of
identification to
simplify handling or
tracing
• Means of legally
protecting unique
features
• Signal of quality
level to satisfied
customers
• Means of endowing
products with
unique associations
• Source of
competitive
advantage
• Source of financial
returns
Can Anything
Be Branded?
• Services
• Retailers and
Distributors
• Online Products and
Services
• People and
Organizations
• Sports, Arts, and
Entertainment
• Geographic Locations
• Ideas and Causes
Branding
Challenges and
Opportunities
• Savvy Customers
• Economic Downturns
• Brand Proliferation
Strategic Brand
Management
Process
• Identifying and
Developing Brand
Plans
• Designing and
Implementing Brand
Marketing Programs
• Measuring and
Interpreting Brand
Performance
• Growing and
Sustaining Brand
Equity
2.2
3. What makes a brand strong?
How do you build a strong brand?
2.3
4. 2.4
Customer-Based Brand Equity
“The differential effect that brand knowledge has
on consumer response to the marketing of that
brand.”
Keller, 1993
5. 2.5
Customer-Based Brand Equity
Differential effect
Differences in consumer response
Brand knowledge
A result of consumers’ knowledge about the brand
Consumer response to marketing
Choice of a brand
Recall of copy points from an ad
Response to a sales promotion
Evaluations of a proposed brand extension
6. 2.6
Brand Equity as a “Bridge”
Reflection of past investments in the marketing of
a brand
Direction for future marketing actions or
programs
7. 2.7
Making a Brand Strong:
Brand Knowledge
Brand knowledge is the key to creating brand
equity.
Brand knowledge consists of a brand node in
memory with a variety of associations linked to
it. (Associative network memory model)
Brand knowledge has two components: brand
awareness and brand image.
e.g. what comes to your mind when asked about
APPLE computers?
9. 2.9
Sources of Brand Equity
Customer-based brand equity occurs when the consumer has a high level of awareness
and familiarity with the brand and holds some strong, favorable, and unique brand
associations in memory.
Brand awareness
Brand recognition
Brand recall
Brand image
Strong, favorable, and unique brand associations
10. 2.10
Brand Awareness Advantages
Learning advantages
Register the brand in the minds of consumers
Consideration advantages
Likelihood that the brand will be a member of the
consideration set
Choice advantages
Affect choices among brands in the consideration
set
12. 2.12
Establishing Brand Awareness
Increasing the familiarity of the brand through
repeated exposure (for brand recognition)
Forging strong associations with the appropriate
product category or other relevant purchase or
consumption cues (for brand recall)
13. 2.13
Creating a Positive Brand Image
Brand Associations (Brand attributes or Brand benefits)
Strength of Brand Associations
Personal Relevance
Consistency
Does not matter which source of brand association
Favorability of Brand Associations
e.g. Fedex
Uniqueness of Brand Associations
Marketers should recognize the influence of these other sources of
information by both managing them as well as possible and by
adequately accounting for them in designing communication
strategies.
16. Nature of competition
Indirect competition
Multiple frames of reference
Points of parity(POP)& point of difference (POD)
POD have reasons to believe (RTBs)
Performance attributes (e.g. safety)
Performance benefits (e.g. consumer friendly, smart features)
Imagery associations
POP
Category POP
Competitive POP
Correlational POP
2.16
17. Positioning guidelines
Defining and Communicating the Competitive
Frame of Reference (e.g. Coke-Asprin)
Communicating Category Benefits (e.g. cake mix)
Exemplars (e.g Tommy Hilfiger)
Product Descriptor (e.g. USAIR)
Choosing POP & POD
Desirability Criteria (e.g. organic food)
Deliverability Criteria
Feasibility (e.g Mountain DEW)
Communicability (100% pomegranate juice preventing
heart disease, prostate cancer & erectile dysfunction)
Differentiation Criteria 2.17
18. Establishing Points-of-Parity and Points-of-
Difference
Following are the ways to address the problem of
negatively correlated POPs and PODs.
Separate the Attributes (e.g. Head & Shoulders )
Leverage Equity of Another Entity ( e.g. P&G SK-II)
Redefine the Relationship (e.g. Apple computers “user
friendly” to “The power to be your best )
Straddle Positions (e.g. BMW luxury-POP & performance-POD.
The ultimate driving machine)
2.18
19. Updating positioning over time
Expansion (laddering) as explained by Maslow’s need hierarchy
Competitive action (reacting)-do nothing, defensive, offensive
Developing a good positioning
First, a good positioning has a “foot in the present” and a “foot in the
future.”
Second, a good positioning is careful to identify all relevant points-of-
parity.
Third, a good positioning should reflect a consumer point of view in
terms of the benefits that consumers derive from the brand.
Finally, as we will develop in greater detail with the brand resonance
model. that appeal both to the “head” and the “heart.”
2.19
20. DEFINING A BRAND MANTRA
Brand Mantras
is a short, three- to five-word phrase that captures the
irrefutable essence or spirit of the brand positioning e.g.
McDonald’s brand philosophy of “Food, Folks, and Fun”
Designing Brand Mantra
Implementing a Brand Mantra – considerations
Communicate
Simplify
Inspire 2.20
21. Chapter 2 Customer-Based Brand Equity and Brand Positioning
Customer-Based
Brand Equity
• Defining
Customer-Based
Brand Equity
• Brand Equity as a
Bridge
Making a Brand
Strong:
• Brand
Knowledge
• Brand
awareness
• Brand
knowledge
• Associative
network memory
model
Sources of Brand
Equity
• Brand Awareness
• Brand
Recognition
• Brand Recall
• Brand Image
• Brand
Attributes
• Brand Benefits
Identifying and
Establishing Brand
Positioning
• Basic Concepts
• Target Market
• Nature of
Competition
• Points-of-Parity
and Points-of-
Difference
Positioning
Guidelines
• Defining and
Communicating
the Competitive
Frame of
Reference
• Choosing Points-
of-Difference
• Establishing
Points-of-Parity
and Points-of-
Difference
• Straddle
Positions
• Updating
Positioning over
Time
• Developing a
Good Positioning
Defining a Brand
Mantra
• Communicate
• Simplify
• Inspire
2.21
22. 2.22
Four Questions Customers ask of Brands
1. Who are you? (brand identity)
2. What are you? (brand meaning)
3. What about you? What do I think or feel about
you? (brand responses)
4. What about you and me? What kind of
association and how much of a connection
would I like to have with you? (brand
relationships)
23. 2.23
Customer-Based Brand Equity Pyramid
RESONANCE
SALIENCE
JUDGMENTS FEELINGS
PERFORMANCE IMAGERY
4.
RELATIONSHIPS
=
What about you
and me?
3. RESPONSE
=
What about
you?
2.
MEANING =
What are
you?
1.
IDENTITY =
Who are you?
24. Sub-Dimensions of CBBE Pyramid
RESONANCE
LOYALTY
ATTACHMENT
COMMUNITY
ENGAGEMENT
JUDGEMENTS
QUALITY
CREDIBILITY
CONSIDERATION
SUPERIORITY
FEELINGS
WARMTH
FUN
EXCITEMENT
SECURITY
SOCIALAPPROVAL
SELF-RESPECT
SALIENCE
CATEGORY IDENTIFICATION
NEEDS SATISFIED
PERFORMANCE
PRIMARY CHARACTERISTICS &
SECONDARY FEATURES
PRODUCT RELIABILITY,
DURABILITY &
SERVICEABILITY
SERVICE EFFECTIVENESS,
EFFICIENCY & EMPATHY
STYLE AND DESIGN
PRICE
IMAGERY
USER PROFILES
PURCHASE &
USAGE
SITUATIONS
PERSONALITY &
VALUES
HISTORY,
HERITAGE
& EXPERIENCES
25. 2.25
Salience Dimensions
Depth of brand awareness
Ease of recognition and recall
Strength and clarity of category membership
Breadth of brand awareness e.g. Tropicana orange juice
Purchase consideration
Consumption consideration
26. 2.26
Product Category Structure
To fully understand brand recall, we need to appreciate
product category structure, or how product categories are
organized in memory.
27. 2.27
Depth and Breadth Importance
The product category hierarchy shows us not
only the depth of awareness matters but also the
breadth.
The brand must not only be top-of-mind and have
sufficient “mind share,” but it must also do so at
the right times and places.
28. 2.28
Performance Dimensions
Primary ingredients and supplementary features
Product reliability, durability, and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price
29. 2.29
Imagery Dimensions
User profiles
Demographic and psychographic characteristics
Actual or aspirational
Group perceptions—popularity
Purchase and usage situations
Type of channel, specific stores, ease of purchase
Time (day, week, month, year, etc.), location, and context of usage
Personality and values
Sincerity, excitement, competence, sophistication, and roughness
History, heritage, and experiences
Nostalgia
Memories
31. 2.31
Feelings Dimensions
Warmth
Fun e.g. Disney Experiential/Immediate
Excitement e.g. MTV
Security e.g. Statelife Insurance
Social Approval Private
Self-respect
32. 2.32
Resonance Dimensions
Behavioral loyalty
Frequency and amount of repeat purchases e.g. Pampers
Attitudinal attachment e.g. Xerox products
Love brand (favorite possessions; “a little pleasure”)
Proud of brand
Sense of community e.g. Harley Davidson
Kinship
Affiliation
Active engagement
Seek information
Join club
Visit website, chat rooms
34. Application:
Identify the Key Drivers of Brand Equity
0.17 0.66
0.24
0.65
Performance
Imagery Feelings
Judgment
Resonance
0.58
0.49
35. 2.35
Brand Building Implications
Customers own brands.
Don’t take shortcuts with brands.
Brands should have a duality.
Brands should have richness.
Brand resonance provides important focus.
36. 2.36
Creating Customer Value
Customer-brand relationships are the
foundation of brand resonance and building a
strong brand.
The customer-based brand equity model
certainly puts that notion front and center.
38. 2.38
Is a company consumer-centric?
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?
Sources: Larry Selden and Geoffrey Colvin, 2004.
40. 2.40
Customer Equity
Blattberg and Deighton (1996) offer eight guidelines as a means
of maximizing customer equity:
Invest in highest-value customers first
Transform product management into customer management
Consider how add-on sales and cross-selling can increase customer equity
Look for ways to reduce acquisition costs
Track customer equity gains and losses against marketing programs
Relate branding to customer equity
Monitor the intrinsic retain ability of your customer
Consider writing separate marketing plans—or even building two
marketing organizations—for acquisition and retention efforts
41. 2.41
Customer Equity
The sum of lifetime values of all customers
Customer lifetime value (CLV) is affected by
revenue and by the cost of customer acquisition,
retention, and cross-selling
Consists of three components:
Value equity
Brand equity
Relationship equity
Rust, Zeithamal & Lemon, 2004
42. 2.42
Relationship of Customer Equity to
Brand Equity
Customers drive the success of brands but
brands are the necessary touchpoint that firms
have to connect with their customers.
Customer-based brand equity maintains that
brands create value by eliciting differential
customer response to marketing activities.
The higher price premiums and increased levels
of loyalty engendered by brands generate
incremental cash flows.