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- 1. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. CHAPTER:2 CUSTOMER-BASED EQUITY AND BRAND POSITIONING
- 2. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Customer-Based Brand Equity Defining Customer-Based Brand Equity Brand Equity as a Bridge
- 3. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Defining Customer Based Brand Equity (CBBE) Approaches brand equity from the perspective of the consumer Stresses that the power of a brand lies in what resides in the minds and hearts of customers Differential effect that brand knowledge has on consumer response to the marketing of that brand
- 4. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 2.4 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
- 5. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Figure 2.1- Marketing Advantages of Strong Brands
- 6. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Brand Equity as a Bridge Brand as a Reflection of the Past Brand as a Direction for the Future
- 7. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. To Sum up ... Consumers perception of the brand plays a key role in determining the worth of the brand Brand equity offers guidance to interpret past marketing performance and design future marketing programs Other factors that influence brand success and equity are: Employees, suppliers, and channel members Media and government
- 8. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Brand Knowledge Key to create brand equity Creates the differential effect that drives brand equity Marketers need an insightful way to represent how brand knowledge exists in consumer memory
- 9. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Figure2.2 - Possible Apple Computer Associations
- 10. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Sources of Brand Equity Brand Awareness Brand Image
- 11. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 2.11 Sources of Brand Equity Brand awareness Brand recognition is extent to which a consumer can correctly identify a particular product or service just by viewing the product or service's logo, tag line, packaging or advertising campaign. If customers decide which brand to buy while in store, then brand recognition is pretty important. Brand recall consumers to think of your brand when they are thinking about the category. To recall from memory. If your customers make their decisions outside the store, then recall is the thing to focus on.
- 12. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 2.12 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
- 13. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 2.13 Creating a Positive Brand Image Brand Associations Does not matter which source of brand association Need to be favorable, strong, and unique 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.
- 14. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Brand Image • More deeply a person thinks about product information and relates it to existing brand knowledge, stronger is the resulting brand association Strength of Brand Associations • Is higher when a brand possesses relevant attributes and benefits that satisfy consumer needs and wants Favorability of Brand Associations • “Unique selling proposition” of the product • Provides brands with sustainable competitive advantage Uniqueness of Brand Associations
- 15. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. To Sum up... To create brand equity, marketers should: Create favorable consumer response i.e. brand awareness Create positive brand image though brand associations that are strong, favorable, and unique
- 16. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Identifying and Establishing Brand Positioning Basic Concepts Target Market Nature of Competition Points-of-Parity and Points-of-Difference
- 17. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Basic Concepts Brand positioning Act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customers’ minds Finding the proper “location” in the minds of consumers or market segment Allows consumers to think about a product or service in the “right” perspective
- 18. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Target Market Market segmentation: Divides the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior Involves identifying segmentation bases and criteria Criteria Identifiability Size Accessibility Responsiveness
- 19. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Figure 2.3 - Consumer Segmentation Bases
- 20. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Figure 2.5 - Hypothetical Examples of Funnel Stages and Transitions
- 21. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Points of Parity and Points of Difference Point of difference refers to the factors of goods or services that establish differentiation. Attributes or benefits consumers strongly associate with a brand, positively evaluate and believe they could not find to the same extent with a competing brand i.e. points where you are claiming superiority or exclusiveness over other products in the category.
- 22. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Points of Parity and Points of Difference Point of Parity - Associations that are not necessarily unique to the brand but may be shared by other brands i.e. where you can at least match the competitors claimed best. While POPs may usually not be the reason to choose a brand, their absence can certainly be a reason to drop a brand.
- 23. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. To Sum up… To appropriately position a brand, marketers should: Identify their target customers Analyze the type of competition they might face in the identified market base Identify product features and associations that are different or similar to their competitors
- 24. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. 2.24 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)
- 25. 2.25 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?
- 26. Sub-Dimensions of CBBE Pyramid LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT QUALITY CREDIBILITY CONSIDERATION SUPERIORITY WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT CATEGORY IDENTIFICATION NEEDS SATISFIED PRIMARY CHARACTERISTICS & SECONDARY FEATURES PRODUCT RELIABILITY, DURABILITY & SERVICEABILITY SERVICE EFFECTIVENESS, EFFICIENCY & EMPATHY STYLE AND DESIGN PRICE USER PROFILES PURCHASE & USAGE SITUATIONS PERSONALITY & VALUES HISTORY, HERITAGE & EXPERIENCES
- 27. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. Brand Mantra Designing a Brand Mantra Implementing a Brand Mantra
- 28. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall. To Sum up... A good brand mantra should: Communicate the category of the business to set the brand boundaries and clarify what is unique about the brand Be simple, crisp, and vivid Stake out ground that is personally meaningful and relevant to as many employees as possible
- 29. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall
Editor's Notes
- Two questions often arise in brand marketing: What makes a brand strong? How do you build a strong brand? These questions help in understanding customer-based brand equity.
- Positive customer-based brand equity - When consumers react more favorably to a product and the way it is marketed when the brand is identified than when it is not. Negative customer-based brand equity - When consumers react less favorably to marketing activity for the brand compared with an unnamed or fictitiously named version of the product. The three key ingredients of CBBE: Differential effect Brand knowledge Consumer response to marketing
- Brand as a reflection of the past Marketers should consider the money spent in brand building as an “ investment”. On the basis of the past experience, what consumers saw, heard, learned, felt, and experienced about the brand should be analyzed. The quality of the investment in brand building is the most critical factor, not the quantity. Brand as a direction to the future Brand knowledge that marketers create over time, which allows them to determine appropriate and inappropriate future directions for the brand. Brand equity offers focus and guidance, provides a means to interpret past marketing performance and design future marketing programs.
- Brand awareness: Related to the strength of the brand node or trace in memory. Brand recognition: Consumers’ ability to confirm prior exposure to the brand when given the brand as a cue. Brand recall: Consumers’ ability to retrieve the brand from memory when given the product category, the needs fulfilled by the category, or a purchase or usage situation as a cue. Advantages of brand awareness Learning advantages Consideration advantages Choice advantages The elaboration- likelihood model Consumer purchase motivation Consumer purchase ability
- 7
- Brand image: Consumers’ perceptions about a brand. Positive brand image - Requires strong favourable and unique brand associations. Forging strong associations with the appropriate product category. Forms of brand associations: Brand attributes: Descriptive features that characterize a product or service. Brand benefits: The personal value and meaning that consumers attach to the product or service attributes.
- Points-of-difference associations Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that: They cannot be found to the same extent with a competitive brand. Functional-performance related considerations. Abstract-imagery related considerations. Points- of-parity associations Attributes shared with other brands. Three types of associations are: Category points- of-parity: Necessary conditions for brand choice. Competitive points-of-parity: Associations designed to negate competitors’ points-of-difference. Correlational points-of-parity: Potential negative associations that arise from the existence of other, more positive associations for the brand. Points-of-parity versus points-of-difference Unless certain points-of-parity can be achieved to overcome potential weaknesses, points-of-difference may not even matter. There is a “zone” or “range of tolerance or acceptance” with points-of-parity. Points-of-parity are easier to achieve than points-of-differences.
- Points-of-difference associations Attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that: They cannot be found to the same extent with a competitive brand. Functional-performance related considerations. Abstract-imagery related considerations. Points- of-parity associations Attributes shared with other brands. Three types of associations are: Category points- of-parity: Necessary conditions for brand choice. Competitive points-of-parity: Associations designed to negate competitors’ points-of-difference. Correlational points-of-parity: Potential negative associations that arise from the existence of other, more positive associations for the brand. Points-of-parity versus points-of-difference Unless certain points-of-parity can be achieved to overcome potential weaknesses, points-of-difference may not even matter. There is a “zone” or “range of tolerance or acceptance” with points-of-parity. Points-of-parity are easier to achieve than points-of-differences.
- Brand mantra Short, three-to five-word phrase that captures the irrefutable essence or spirit of the brand positioning. Provides guidance about: What products to introduce under the brand. What ad campaigns to run. Where and how the brand should be sold. Designing a brand mantra A good brand mantra should provide: Brand functions: Nature of the product or service or the type of experiences or benefits the brand provides. Descriptive modifier: Combined with brand functions, helps delineate the brand boundaries. Emotional modifier: Determines how a brand provides benefits and in what ways. Implementing brand mantra Should be developed at the same time as the brand positioning. Requires more internal examination and involves input from a wider range of company employees. Based on core brand associations, a brainstorming session can attempt to identify PODs, POPs, and different brand mantra candidates.