Brand Equity

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Brand Equity

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  2. 2. 2Strategic Brand Management
  3. 3. 33Mental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantraMixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associationsBrand Value ChainBrand auditsBrand trackingBrand equity management systemBrand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalizationKEY CONCEPTSSTEPSGrow and SustainBrand EquityIdentify and EstablishBrand Positioning and ValuesPlan and ImplementBrand Marketing ProgramsMeasure and InterpretBrand Performance
  4. 4. 4Concept ofCustomer BasedBrand Equity
  5. 5. 5Keller’s Definition of Brand EquityBrand equity is defined as the differential effect thatknowledge about the brand has on consumer responseto the marketing of that brandProfessor Kevin Keller
  6. 6. 6What Is Brand Equity?Brand Equity is simply what consumers’ hold in their head about abrand and how that affects their behaviourWhat consumers doWhat consumers know
  7. 7. 7Consumer Based Brand EquityPositive customer-based brand equity results whenconsumers respond more favorably to the marketingactivities when the brand is identified than when it is notThe Pepsi Challenge” where consumers preferPepsi in a blind taste test but choose Cokewhen the brand is exposedNestle Pure Life where consumers are willingto pay price premium as compared to ordinarytap waterClassic Examples:
  8. 8. 8Benefits of Equity• Loyal Customers• Charge a price premium• Trade co-operation• Brand extensions• Communication messages get throughetc etc ………Building brand equity will improve brand profitability
  9. 9. 9Elements of Brand Equity:Brand LoyaltyBrand AwarenessPerceived QualityBrand Associations
  10. 10. 10Brand LoyaltyBrand loyalty is a measure of theattachment that a customer has to abrand.It reflects how likely a customer will be toswitch to another brand, especially when thatbrand makes a change, either in price or inproduct features.
  11. 11. 11Brand Loyalty PyramidCommitted BuyerLikes the Brand - Considers it a FriendSatisfied Buyer With Switching CostsHabitual Buyer - No Reason to ChangeIndifferent – No Brand LoyaltySwitchers / Price Sensitive
  12. 12. 12Measuring Brand Loyalty• Purchase Behavior Patterns• Switching Cost Analysis• Satisfaction Measurement
  13. 13. 13Strategic Value of Brand Loyalty• Reduce marketing cost• Trade (channel distribution) leverage• Attracting new customers
  14. 14. 14EnhancingBrand Loyalty• Treat the customer right• Stay close to the customer• Measure/manage customersatisfaction• Create switching cost• Provide extras
  15. 15. 15Elements of Brand Equity:Brand LoyaltyBrand AwarenessPerceived QualityBrand Associations
  16. 16. 16Brand Awareness isthe ability of a potentialbuyer to recognize or recallthat a brand is a member ofa certain product category
  17. 17. 17Brand Awareness HierarchyTop of MindBrand RecallBrand RecognitionUnaware of Brand
  18. 18. 18Value of Brand Awareness• Anchor to which other associations can beattached• Familiarity and liking• Signal of substance/commitment• Brand to be considered
  19. 19. 19How to AchieveBrand AwarenessBe different, memorableInvolve a slogan or jingleSymbol exposurePublicityEvent sponsorship
  20. 20. 20Elements of Brand Equity:Brand LoyaltyBrand AwarenessPerceived QualityBrand Associations
  21. 21. 21The customers perception of the overallquality or superiority of a product or servicewith respect to its intended purpose, relative toalternatives. Perceived quality is a perceptionby customers.Perceived Quality
  22. 22. 22WhatInfluencesPerceivedQuality ofProduct?• Performance• Features• Conformance withspecifications• Reliability• Durability• Serviceability• Fit and finish
  23. 23. 23WhatInfluencesPerceivedQuality ofService?AppearanceReliabilityCompetenceResponsivenessEmpathy
  24. 24. 24The Value of Perceived Quality• Reason-to-Buy• Differentiate/Position• A Price Premium• Channel Member Interest• Brand Extensions
  25. 25. 25Elements of Brand Equity:Brand LoyaltyBrand AwarenessPerceived QualityBrand Associations
  26. 26. 26Brand AssociationA brand association is anything"linked" in memory to a brand.Thus, McDonalds could be linked to acharacter such as Ronald McDonald, aconsumer segment such as kids, a feelingsuch as having fun, a product characteristicsuch as service, or a symbol such as theGolden Arches.
  27. 27. 27Some Types ofAssociations• Product Attributes• Customer Benefits• Relative Price• Lifestyle/Personality• Celebrity/Person• Use/Application
  28. 28. 28The Value of BrandAssociations• Help Process/RetrieveInformation• Differentiate/Position• Reason-to-Buy• Create PositiveAttitudes/Feelings• Basis for Extensions
  29. 29. 29MaintainingAssociations• Be consistent over time• Be consistent overelements of the marketingprogram• Manage disasters in orderto minimize their damage
  30. 30. 30Criteria forBrand Name Selection• Be easy to learn and remember• Suggest the product class• Support a symbol or slogan• Suggest desired association withoutbeing boring or trivial• Not suggest undesired associations• Be distinctive• Be available and protectable legally
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  33. 33. 33Measuring Equity
  34. 34. 34Gauging Equity is about determining what is inside a consumer’shead concerning a brand . . .
  35. 35. 35. . . And it impacts on how consumers actually react to abrand.
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  37. 37. 37This means that managing brand equity requires more than justcreating awareness and building favorable associations1) SOURCES 2)OUTCOMES Managing brands involves knowing your sources of brandequity Brand equity must result in tangible outcomes
  38. 38. 38The Outcome Must Be…….• It is a favourite brand amongst consumers• It is a brand consumers are happy to recommend tosomeone else• It is a brand for which consumers are more willing to payhigher pricesBased on the above principleBrand Equity Index for eachbrand is calculatedThis index is a single measure ofhow strong a brand is
  39. 39. 39So to Gauge Equity……What does my consumer find important in this categoryand how is my brand performing on those drivers?
  40. 40. 40Category Drivers: Add up to 100% Are a result of all that has happened in the category in the past Change over time through marketing effort: mid to long term Show you how you or your competitor are changing the rules acrossconsumer segments Set the framework for evaluating our brand strength (Equity)Category Drivers - Explained...
  41. 41. 41Brand Equity Index - Explained...Brand Equity Index: Range from 0 to 10 Is a measure of a brands strength on current category drivers Changes over time through marketing effort:short to mid term Shows how you or your competitor are performing within a consumersegment Can be tracked over time to evaluate effectiveness of mktg initiatives
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  43. 43. 43Category Drivers What consumers do or feelConsumerLoyaltyPricePremiumDrivers of the Chocolate CategoryAwareness (27 % )Consideration (9 % )Advertising (16 % )Product benefit ( 22 % )For everyone ( 18 % )Special Benefits(8 % )BrandEquity Index
  44. 44. 44For everyoneProduct BenefitAdvertisingSpecial Benefits
  45. 45. 45Brand Equity Indices Initially Galaxy had high equity followed by Nestle Snickers low on equity - low score on Product Benefit - key categorydriverMin = 0Max = 10
  46. 46. 46How do the main brands perform on key dimensions? Galaxy & Nestle are strong on product benefit which is the mostimportant Equity driverProduct Benefit For EveryoneAdvertisingSpecial BenefitsNestle High High High LowGalaxy High Medium High LowCadburys Medium High Medium LowMars Medium Medium Low LowSnickers Low Low Low HighWayForward
  47. 47. 47Mirza Shakeel

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