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Brand management ch. 2 and 3

Brand Management presentation

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Brand management ch. 2 and 3

  1. 1. Customer-Based Brand Equity Part 1 Chapter 2 Lilly Beil, Jennifer Butler, Emily Huang
  2. 2. Customer-Based Brand Equity CBBE Model: incorporates theoretical advances and managerial practices in understanding and influencing consumer behavior. Aka: understanding the needs or wants of the customer
  3. 3. CBBE Basic Premise The power of a brand lies in what consumers have learned, felt, seen, and heard about the brand as a result of their experiences.
  4. 4. 3 Ingredients to CBBE Model  Differential effect  Brand Knowledge  Consumer response to marketing
  5. 5. Differential Effect  Brand equity arises from differences in consumer response  No differences = Commodity  If a commodity, competition becomes based on price  Examples: Who has the better french fries? McDonalds or Burger King?
  6. 6. Brand Knowledge  Drives brand equity  Associative network memory model: views memory as a network of nodes and links, in which nodes represent stored information or concepts  Knowledge about the brand changes the consumer’s perception of the brand  For example: Apple
  7. 7. Brand Knowledge cont.  Can be characterized in terms of 2 components:  Brand awareness: strength of the brand node or trace in memory; ability to identify brand under different conditions  Brand image: perceptions about a brand held in consumer’s memory  Examples: Apple  user friendly, creative, iPhone, iPad  Class activity
  8. 8. What is the association that comes to mind with these brands?
  9. 9. What is the association that comes to mind with these brands?
  10. 10. What is the association that comes to mind with these brands?
  11. 11. What is the association that comes to mind with these brands?
  12. 12. What is the association that comes to mind with these brands?
  13. 13. Consumer Response to Marketing  How does a company’s marketing techniques effect the consumer?  What kind of feelings are stirred in their marketing techniques?
  14. 14. Sources of Brand Equity  Reminder: CBBE occurs when the consumer has a high level of awareness and familiarity with the brand and holds in their memory some strong, favorable, and unique brand associations  Key to Branding: Consumers must not think that all brands in the category are the same!
  15. 15. Brand Awareness  Brand recognition: relates to customers’ ability to confirm exposure to the brand when given the brand as a cue  Can consumers correctly identify a brand?  If a consumer is aware of a specific brand, it is put into a “consideration set”.  Sometimes if a consumer is only aware of one brand of a certain product or service, they will only consider that one brand  Class question: Is there a specific brand you always choose because it’s the only brand you are aware of? For example: medicine
  16. 16. 3 main reasons brand awareness is important in consumer behavior:  Learning advantages  Creation of a brand image  brand node has been established in memory  Consideration advantages  Increase of brand awareness, increase of consideration set  Choice advantages  Brand awareness increases association even if there isn’t any other associations to those brands  When consumers have low involvement in purchasing decisions, they will choose the brand they are most aware of
  17. 17. Brand awareness cont.  Develop a slogan, jingle, or ad that creatively pairs the brand and the appropriate category  Video:
  18. 18. Brand Image Ways brand associations can be created:  Direct experience  Information communication  Word of mouth  Assumptions from the brand itself  Identification of the brand with a company, country, channel of distribution, particular person, particular place, and particular event
  19. 19. Brand image cont.  Word of mouth is very important for restaurants, entertainment, banking, and personal services  See Figure 2.4 page 63  Favorable brand associations: created by convincing consumers that the brand possesses attributes and benefits that satisfy their needs and wants
  20. 20. Brand Desirability Depends on three factors:  How relevant consumers find the brand association  How distinctive consumers find the brand association  How believable consumers find the brand association
  21. 21. Deliverability  Creating a favorable association also requires that the firm be able to deliver on the desired association  What would be the cost or investment necessary and the length of time involved to create or change the desired association?  Depends on 3 factors:  The actual or potential ability of the product to perform  The prospects of communicating that performance  The sustainability of the actual and communicated performance over time
  22. 22. 4 Steps to Building a Brand 1. Identify the brand with customers and associate the brand in customers’ minds with a specific product class or customer need Who are you? 2. Establish the totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations with certain properties What are you? 3. Elicit the proper customer responses to this brand identification and brand meaning What about you? What do I think or feel about you? 4. Convert brand response to create an intense, active loyal relationship between customers and the brand What about you and me? What kind of association and how much of a connection would I like to have with you?
  23. 23. Brand Building Blocks Resonance FeelingsJudgements Performance Imagery
  24. 24. Breadth and depth of awareness  Breadth: the range of purchase and usage situations in which the brand element comes to mind  Depth: the likelihood that a brand element will come to mind and the ease with which it does so
  25. 25. Brand Performance  Ways a brand tries to meet needs  5 important types of attributes and benefits that often underlie brand performance:  Primary ingredients and supplementary features  Product reliability, durability, and serviceability  Service effectiveness, efficiency and empathy  Style and design  Price
  26. 26. Brand Imagery  Extrinsic properties of the product or service, including the ways in which it attempts to meet customer’s psychological or social needs  Customers will be targeted demographically and psychographically
  27. 27. Brand Personality  Personality traits can be shown through product animation techniques or celebrities used in ads  Tone is important  Personality needs to be consistent with the brand  Watch ad here   What kind of personality is CoverGirl trying to portray?
  28. 28. Brand Judgements  Focus on customers’ personal opinions and evaluations  In terms of creating a strong brand, four types of summary brand judgments are particularly important:  Quality  Credibility  Consideration  Superiority
  29. 29. Brand Feelings  What emotions are evoked when the consumer sees the brand?  Is there…  Warmth  Fun  Excitement  Security  Social approval  Self-respect
  30. 30. Brand Resonance  Intensity or psychological depth/bond with the brand  Behavioral loyalty  Attitudinal attachment  Sense of community  See Harley Davidson Video:  Active engagement
  31. 31. Brand Salience  Relates to aspects of the awareness of the brand  How often and easily is the brand evoked under various situations or circumstances  To what extent is the brand easily recalled or recognized?  Brand awareness is more than just recognizing the company! Watch this video 
  32. 32. Creating Customer Value  Customer-brand relationships are the foundation of brand resonance and building a strong brand.  CBBE model: Power of a brand resides in the minds of consumers and customers. Achieve Customer Value by Putting Customers First
  33. 33. Creating Customer Value  Putting Customers First 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?
  34. 34. Case Study  Had a remarkable revival in the 1990s with 50% growth for 7 years  Turn of the century took a turn for the worst.  2005: Stagnant Sales & losing money in US market  Culprit? CEO says VW was not customer-focused  Focused too much on technology advancement  « How does it help the customer and will the customer pay for it? »
  35. 35. Case Study  Google Glass  Google announced in January that Glass would be going away “as we know it.”  Hyped up product  Time Magazine named it one of the “Best Inventions of the Year”  Comedic Punch Line: The Simpsons, Saturday Night Live, The Colbert Report.  Tumblr account “White Men Wearing Google Glass”
  36. 36. The Marketing Advantages of Strong Brands  Greater loyalty and less vulnerability to competitive marketing  Larger margins  Greater trade co-operation and support  Increased marketing communication effectiveness  Licensing opportunities  Additional brand extension opportunities
  37. 37. Which brands do you have the most resonance with? Why?
  38. 38. Things to Remember:  Customer-based brand equity has 3 ingredients:  Differential effect  Brand knowledge  Consumer response to marketing  The power of a brand lies in what the consumers have experienced with your brand!  Good brand positioning helps guide your marketing strategy.
  39. 39. Part 2 Chapter 3: Brand Positioning
  40. 40. Identifying and Establishing Brand Positioning  “The heart of the marketing strategy”  Brand Positioning: the act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customer’s mind.  Good brand positioning helps guide marketing strategy
  41. 41. Can you identify the Target Markets of these Companies?
  42. 42.  “upscale homeless person, who has a slight degree of angst and is probably in the life stage of 18 to 26”  From traditional homes and advantage, but this offers them the benefit of rebellion  The Urban shopper “leads a pretty cloistered existence.”  “Although they deem themselves worldly, they believe the way they see things personally is the correct way and everyone else feels exactly the same way.”
  43. 43.  “…Probably when they were little, they saw the older kids do something they thought was really cool, and they weren’t allowed to do it and now that they’re adults, it’s sort of like ice cream for breakfast, they can do whatever they want now. They’re out on their own, independent. So one thing that actually Urban Outfitters is selling now is Beavis and Butthead tees, which sort of surprised me because I was no fan of it, but maybe I was little bit older then, but that was in 1992 … They undoubtedly probably don’t know anything about Beavis and Butthead but simply remember that being something the older cool kids did and something, clearly, they were denied.” Urban Outfitters Executive Director Sue Otto
  44. 44.  The Anthropologie customer is a bit more polished, a bit more older and she has much less angst … She tends to be a homeowner and she tends to be in a relationship and more likely than not, married with children.”  We say that this is the customer you want to have at a dinner table. She’s an optimist. She’s aware of what’s going on in the world, but she chooses to focus on the positives, not the negatives … She shops at J.Crew, she shops at Nordstrom, she shops at boutiques … She may go to Banana Republic for a basic pant, but she’s not buying her wardrobe there. She’s not shopping at Ann Taylor. She’s certainly not shopping at Chico’s.”  The Anthropologie customer is dressing for respectability in her community, with her friends and family.”
  45. 45. “The Free People customer is happy. She loves life. She is independent yet loves being with her friends, her family, and her mate. She travels every spring to festivals, Coachella and Wanderlust being her favorite. She runs and practices yoga to stay fit and balanced. She is influenced by fashion but yet seeks inspiration from all over the world to put together a look that is her own. She is a mix of sweet, cool, and boho and everything in between. We target age 26…” — Meg Hayne, Free People president
  46. 46. Segmentation bases Business-to-Business segmentation bases
  47. 47. Segmentation bases Consumer Segmentation bases
  48. 48. Nature of Competition  Deciding to target a certain type of consumer defines the nature of competition because certain other firms have also decided to target that segment or consumers in that segment may already look to certain brands.  Some products and brands are likely to be seen as close substitutes
  49. 49. Points of Difference associations  Points of difference are strong, favorable and unique associations for a brand  They may be based on almost any type of attribute or benefit association that consumers strongly associate with a brand, positively evaluate and believe that they could not find to the same extent with a competitive brand.  Gives consumers a compelling reason to buy a product that competitors could not match
  50. 50. Points of Parity associations  Associations that may be shared with other brands  2 forms: category and competitive  Category points of parity: associations that consumers view as being necessary  Competitive points of parity: associations designed to negate competitor’s point of difference  If a brand can ‘break even’ in areas where its competitors are trying to find an advantage and can achieve advantages in some other areas, the brand should be in a strong position.
  51. 51. Points of Parity vs. Points of Difference  Points of parity are usually easier to achieve because they’re more basic  Points of difference are what demonstrates a brand’s superiority Which is more important?
  52. 52. Positioning Guidelines  Guided by points of difference and points of parity  Two Issues  Defining and communicating the competitive frame of reference  Choosing and establishing points of parity and points of difference
  53. 53. Defining and Communicating the Competitive Frame of Reference  Determine category membership  Products that the brand competes with  Helps make customers aware of that brand’s products  Customer awareness must happen before they will look at the POD’s and POP’s  Some companies straddle two frames – BMW  Three ways to convey category membership 1. Communicate category benefits – product attributes and POP’s 2. Compare with Exemplars 3. Relying on Product Descriptors – convey category origin
  54. 54. Choosing Points of Parity and Points of Difference  Consumers must find POD’s desirable and believe the firm can deliver them  Criteria of desirability 1. Relevance 2. Distinctiveness 3. Believability  Criteria of Deliverability 1. Feasibility – product performs at stated level 2. Communicability – create and strengthen desired associations 3. Sustainability – performance over time
  55. 55. Establishing Points of Parity and Points of Difference  Attributes of POP’s are negatively correlated with attributes of POD’s  How to deal with negative correlation: 1. Separate the attributes – two marketing campaigns 2. Exploit Equity of Another Entity – link brand to a person, other brand, or event and steal equity 3. Redefine the relationship – convince consumers they are positively correlated
  56. 56. Updating Positioning Over Time  Two Issues  Laddering – how to deepen brand and tap into core brand associations  Maslow’s Hierarchy  Means end chain: attributes lead to benefits, which lead to values  When brands become associated with more products they move up the product hierarchy  Reacting – how to respond to competitive challenges that threaten the brand’s current position  Competitors take actions to eliminate POD’s and make the POP’s or establish new POD’s  Three options when this happens: 1. Do nothing – if competitive actions are unlikely to capture the POD 2. Go on defense – strengthen your POD’s and POP’s 3. Go on offensive – reposition your brand by launching a product extension
  57. 57. Defining and Establishing Brand Mantras  Brands span product categories and have several positionings  Want to establish a relationship between core brand associations and the brand mantra  Core Brand Associations  Attributes and benefits that charactereize the 5-10 most important aspects of the brand  Mental maps  Starbucks Example
  58. 58. Brand Mantras  State the core brand promise/essence in 3-5 words  Helps internal employees and external marketing partners understand what the brand represents to the consumer so they can adjust their own strategies  Three terms of mantras 1. Function – nature of product and benefits it will provide 2. Descriptive modifier – describe nature of the business function – Nike 3. Emotional modifier – how the brand provides benefits – Disney  No other brand should excel in all areas of another brand’s mantra  Only captures POD’s – reinforce POP’s another way  Helps determine which categories the brand should extend to
  59. 59. Implementing a Brand Mantra  Should develop mantra at the same time positioning is determined  When creating a mantra consider:  Communicate – mantra should define the brand category and the uniqueness of the brand  Simplify – mantras should be short and memorable  Inspire – relevant to employees  The brand position is directly related to creating a strong brand  Want internal staff members to participate in branding  More motivated to serve and attract customers, which increases the overall brand equity
  60. 60. Things to Remember:  Strong brands exhibit more points of difference  Your brand mantra should correlate with your core brand associations!  Achieve customer value by putting customers first!