Chapter 9

Chapter 9

• 1.
   Dr. ShahzadAhmad Khan  Assistant Professor  Email: shahzad.ahmad@riphah.edu.pk Riphah School of Leadership Faculty of Management Sciences Riphah International University Islamabad CHAPTER :9 Creating Brand Equity
• 2.
  Brand “A name, term,sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.”
• 3.
  9 - 3 TheRole of Brands • Co nsum e rCo nsum e r Be ne fitsBe ne fits • Marke te r Be ne fitsMarke te r Be ne fits • Identify source/makerIdentify source/maker • Simplifies DecisionSimplifies Decision MakingMaking • Reduces RiskReduces Risk Roles of Bands areRoles of Bands are easily defined byeasily defined by “benefits”:“benefits”:
• 4.
  9 - 4 TheRole of Brands • Co nsum e rCo nsum e r Be ne fitsBe ne fits • Marke te r Be ne fitsMarke te r Be ne fits • Simplify productSimplify product handlinghandling • Protect uniqueProtect unique featuresfeatures • Create loyaltyCreate loyalty • Establish barriers toEstablish barriers to entryentry Roles of Bands areRoles of Bands are easily define byeasily define by “benefits”:“benefits”:
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  9 - 5 Scopeof Branding  ““Branding” is endowingBranding” is endowing products and servicesproducts and services with the power of awith the power of a brand – by giving namesbrand – by giving names using brand elements tousing brand elements to help identify ithelp identify it  The key to “branding” isThe key to “branding” is that consumers mustthat consumers must not think that all brandsnot think that all brands in the category are thein the category are the samesame
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  Brand Equity The addedvalue endowed on productsThe added value endowed on products and services because of the brandand services because of the brand “The value of a brand. From a consumer perspective, brand equity is based on consumer attitudes about positive brand attributes and favorable consequences of brand use.”  – American Marketing Association 9 - 6
• 7.
  9 - 7 BrandNames, Logos, Symbols, slogans, jingles, signage 9 - 7 Brands Elements Brand Equity Marketing Activities Other Association Product and service and all accompanying marketing activities and supporting programs. indirectly transferring the brand by linking it to some other entity, such as a person, place, or thing Building Brand Equity
• 8.
  Brand vs Product •A product is anything that is manufactured andA product is anything that is manufactured and present to the customer.present to the customer. • A brand is the specific name of the product.A brand is the specific name of the product. A product can be copied by a competitor;A product can be copied by a competitor; A brand is unique.A brand is unique. A product can be quickly outdated;A product can be quickly outdated; A successful brand is timeless.A successful brand is timeless. 9 - 8
• 9.
  9 - 9 World’sMost Valuable Brand 2014 Top 10 global brands in Impact Media Value as published in Forbes magazine. Source: General Sentiment Inc.
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  9 - 10 This is one of the approach to view brand equity.  Define as; the differential effect that brand knowledge has on consumer response to the marketing of that brand Differences in consumer response Consumers’ brand knowledge Perceptions, preferences, and behaviors Customer-based Brand Equity Stronger brands, greater revenue Consumer reaction towards marketing program Result of marketing program
• 11.
  Customer-Based Brand Equity asa “Bridge” • Customer-based brandCustomer-based brand equity represents theequity represents the “added value” endowed“added value” endowed to a product as a resultto a product as a result of past investments inof past investments in the marketing of athe marketing of a brand.brand. • Customer-based brandCustomer-based brand equity provides directionequity provides direction and focus to futureand focus to future marketing activitiesmarketing activities
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  9 - 12 Advantagesof Strong Brands • Improved perceptions of product performanceImproved perceptions of product performance • GreaterloyaltyGreaterloyalty • LargerMarginsLargerMargins • Less vulnerability to competitive marketing actionsLess vulnerability to competitive marketing actions • Less vulnerable to marketing crisisLess vulnerable to marketing crisis • Increased marketing communications effectivenessIncreased marketing communications effectiveness • Improved employee recruiting and retentionImproved employee recruiting and retention • Greaterfinancial market returnsGreaterfinancial market returns
• 13.
  9 - 13 BrandPromise  Is the marketer’s visionIs the marketer’s vision of what the brand mustof what the brand must be and do forbe and do for consumersconsumers  Consumers will decideConsumers will decide based on what theybased on what they think and feel about thethink and feel about the brandbrand
• 14.
  Brand Promise Brand Promiseidentifies the single Most Important measurable in building valueWhat is brand promise? What is brand promise? 1 ExplanationExplanation 2 ExamplesExamples 3 What is the promise you’re making to your customers that both really matters to them and makes you different from your competitors? Broadband leader in Malaysia Peace of mind
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  • Examples:Examples: 9 -15 Brands Association Quality and dependability Safety Quality and prestige Points of Difference
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  Brand Equity Models •Brand Asset ValuatorBrand Asset Valuator • Brand ResonanceBrand Resonance
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  BAV Key Components
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  Brand Dynamics Pyramid Presence Relevance Performance Advantage Bonding StrongRelationship Weak Relationship
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  Brand Resonance Model
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  Brand salience –how often and how easily customers think of the brand under variousBrand salience – how often and how easily customers think of the brand under various purchase or consumption situationspurchase or consumption situations Brand performance – how well the product or service meets customers’functionalBrand performance – how well the product or service meets customers’functional needsneeds Brand imagery – the ways in which brand attempts to meet customers’psychologicalBrand imagery – the ways in which brand attempts to meet customers’psychological or social needsor social needs Brand judgments – focus on customers’own personal opinions and evaluationsBrand judgments – focus on customers’own personal opinions and evaluations Brand feelings – customers’emotional responses and reactions with respect to theBrand feelings – customers’emotional responses and reactions with respect to the brandbrand Brand resonance – nature of the relationship customers have with the brandBrand resonance – nature of the relationship customers have with the brand Brand Resonance Model
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  1. Memorable –how easily the brand element is recalled and recognized (i.e. short names) 2. Meaningful – credibility of the brand, product ingredient or type of person who might use the brand 3. Likeable – how visually and verbally appealing is the brand element 4. Transferable – can the brand element be used to introduce new products in the same or different categories? 5. Adaptable – how adaptable and updatable is the brand element 6. Protectable – brand names that become synonymous with product categories Brand element choice criteria
• 22.
  1.1. Brand audit- measures “where the brand has been”Brand audit - measures “where the brand has been” 2.2. Brand-tracking studies – measure “where the brand is now” and whetherBrand-tracking studies – measure “where the brand is now” and whether marketing programs are having the intended effectsmarketing programs are having the intended effects Measuring brand equity
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  • Brand valuation– estimating the total financial value of the brandBrand valuation – estimating the total financial value of the brand Measuring brand equity
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  Managing Brand Equity ACOMPREHENSIVE FRAMEWORK FOR MANAGING BRAND EQUITY The intangible assets of brands create the basis of brand equity. Brand equity consists of five different asset dimensions. These assets include: 1) brand loyalty, 2) brand awareness, 3) perceived quality, 4) brand associations, and 5) other proprietary assets such as patents, trademarks and channel relationships. If managed well, these assets add value to the product or service and create additional customer satisfaction, which, in turn, provide a number of benefits to the firm. (Aaker 1991, 19–21)
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  Brand Revitalization • Changein the consumer taste and preference.Change in the consumer taste and preference. • Emergence of new competitors or new technology,Emergence of new competitors or new technology, new development in the marketing environmentnew development in the marketing environment could potential affect the fortunescould potential affect the fortunes of a brand.of a brand.
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  Branding Strategy A firm’sbranding strategy –A firm’s branding strategy – often called brand architectureoften called brand architecture reflects the number andreflects the number and nature of common andnature of common and distinctive elements applied.distinctive elements applied.
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  Branding Strategy 3 choices •Develop new brandDevelop new brand • Apply some existing brandApply some existing brand • Use combination – new and existingUse combination – new and existing
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  Branding Strategy
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  Branding Decision
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  Brand Portfolio • Multiplebrand are often necessaryMultiple brand are often necessary to pursue multiple market segmentto pursue multiple market segment • Some advantages :-Some advantages :-  Increasing shelf presence and retailerIncreasing shelf presence and retailer dependencedependence  Attracting customer for varietyAttracting customer for variety  Increasing internal competition within the firmIncreasing internal competition within the firm  Economies of scale in advertising, sales,Economies of scale in advertising, sales, merchandising and physical distributionmerchandising and physical distribution
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  Type and Roleof Brand Portfolio
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  1.What is abrand, and how does branding work? 2. What is brand equity? How is brand equity built, measured, and managed? 4. What are the important brand architecture decisions in developing a branding strategy? 9 - 32