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  1. 1. Marketing Management MBA CP 205
  2. 2. Creating Brand Equity
  3. 3. <ul><li>Learning Objectives: </li></ul><ul><li>Know what is brand and how branding works. </li></ul><ul><li>Know what is brand equity. </li></ul><ul><li>Know how brand equity is built, measured, and managed. </li></ul>Creating Brand Equity
  4. 4. 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. Creating Brand Equity
  5. 5. <ul><li>A brand is a product that adds dimensions that differentiate it in </li></ul><ul><li>some way from other products designed to satisfy the same need. </li></ul><ul><li>The differences may be functional, rational or tangible – related to </li></ul><ul><li>product performance of the brand. </li></ul><ul><li>They may also be more symbolic, emotional or intangible – related </li></ul><ul><li>to what the brand represents. </li></ul>Creating Brand Equity
  6. 6. The Roles of Brands Identify the maker Simplify product handling Organize accounting Offer legal protection Creating Brand Equity
  7. 7. The Roles of Brands Signify quality Creates barriers To entry Serves as a competitive advantage Secure price premium Creating Brand Equity
  8. 8. <ul><li>Brand identify source or maker of a product. Consumers evaluate </li></ul><ul><li>identical products differently depending on how it is branded. </li></ul><ul><li>Brands simplify product handling or tracing, help to organize </li></ul><ul><li>inventory and accounting records. </li></ul><ul><li>Brand offers the firm legal protection for its unique product features. </li></ul><ul><li>Brand name can be protected through registered trade mark, </li></ul><ul><li>manufacturing process through patent and packaging through </li></ul><ul><li>copyright and design. </li></ul>Creating Brand Equity
  9. 9. <ul><li>Brands signal a certain quality so that satisfied consumers can </li></ul><ul><li>choose the product again. </li></ul><ul><li>Competitors can duplicate the product designs but can not easily </li></ul><ul><li>match lasting impressions in consumers’ minds, thus branding can </li></ul><ul><li>be a powerful means to secure competitive advantage. </li></ul><ul><li>Strong brands result in better earnings and profit performance for </li></ul><ul><li>the firms. </li></ul>Creating Brand Equity
  10. 10. Creating Brand Equity Ten Attributes of World’s Strongest Brands <ul><li>Excel at delivering desired benefits. </li></ul><ul><li>Stay relevant. </li></ul><ul><li>Priced to meet perceptions of value. </li></ul><ul><li>Positioned properly. </li></ul><ul><li>Communicate consistent brand messages. </li></ul><ul><li>Well-designed brand hierarchy. </li></ul><ul><li>Use multiple marketing activities. </li></ul><ul><li>Understand consumer-brand relationship. </li></ul><ul><li>Supported by organization. </li></ul><ul><li>Monitor sources of brand equity. </li></ul>
  11. 11. Branding Endowing products and services with the power of a brand. Creating Brand Equity
  12. 12. Creating Brand Equity Brand Equity The differential effect that brand knowledge has on consumer response to the marketing of that brand.
  13. 13. <ul><li>Brand Equity </li></ul><ul><li>Brand equity is the added value endowed to products that may be </li></ul><ul><li>reflected in how consumers think, feel and act w.r.t. to the brand. </li></ul><ul><li>It is also reflected in the prices, market share and profitability that </li></ul><ul><li>the brand commands for the firm. </li></ul><ul><li>As per customer based brand equity perspective, the power of a </li></ul><ul><li>brand lies in what customers have seen, read, heard, learnt, thought </li></ul><ul><li>and felt about the brand over time. </li></ul>Creating Brand Equity
  14. 14. <ul><li>A brand has positive customer based brand equity when consumers </li></ul><ul><li>react more favorably to a product. </li></ul><ul><li>Brand equity arises from differences in consumer response. </li></ul><ul><li>These differences are a result of a consumer’s knowledge about the </li></ul><ul><li>brand. </li></ul><ul><li>The differential response by consumers is reflected in perceptions, </li></ul><ul><li>preferences and behavior related to all aspects of marketing of a </li></ul><ul><li>brand. </li></ul>Creating Brand Equity
  15. 15. Creating Brand Equity Brand Knowledge Knowledge Thoughts Experiences Beliefs Images Feelings
  16. 16. Creating Brand Equity Brand Associations Strong Unique Favorable
  17. 17. Creating Brand Equity Marketing Advantages of Strong Brands <ul><li>Improved perceptions of product performance. </li></ul><ul><li>Greater loyalty. </li></ul><ul><li>Less vulnerable to competition. </li></ul><ul><li>Less vulnerable to crises. </li></ul><ul><li>Higher margins. </li></ul><ul><li>Inelastic consumer response to price increases. </li></ul><ul><li>Elastic consumer response to price decreases. </li></ul><ul><li>Greater trade cooperation. </li></ul><ul><li>Increase in effectiveness of IMC. </li></ul><ul><li>Licensing opportunities. </li></ul><ul><li>Brand extension opportunities. </li></ul>
  18. 18. Creating Brand Equity Brand Promise The marketer’s vision of what the brand must be and do for Consumers.
  19. 19. Creating Brand Equity Brand Equity Models <ul><li>Brand Asset Valuator </li></ul><ul><li>Aaker Model </li></ul><ul><li>BRANDZ </li></ul><ul><li>Brand Resonance </li></ul>
  20. 20. Creating Brand Equity Brand Asset Valuator (BAV) Differentiation Relevance Esteem Knowledge Brand Equity
  21. 21. <ul><li>Differentiation measures the degree to which a brand is seen as </li></ul><ul><li>different from others. </li></ul><ul><li>Relevance measures the breadth of a brand’s appeal. </li></ul><ul><li>Differentiation and relevance determine Brand Strength and point to </li></ul><ul><li>the future value of the brand. </li></ul><ul><li>Esteem measures how well the brand is regarded and respected. </li></ul>Creating Brand Equity
  22. 22. <ul><li>Knowledge measures how familiar and intimate consumers are with </li></ul><ul><li>the brand. </li></ul><ul><li>Esteem and knowledge create Brand Stature and is more of a score </li></ul><ul><li>card on past performance. </li></ul><ul><li>Examining relationships in these four dimensions reveals much </li></ul><ul><li>about brand’s current and future status. </li></ul><ul><li>Brand strength and brand stature can be combined to form ‘Power </li></ul><ul><li>grid’ that depicts stages in the cycle of brand development. </li></ul>Creating Brand Equity
  23. 23. Creating Brand Equity BAV Power Grid
  24. 24. Creating Brand Equity Aaker Model – Brand Assets Brand loyalty Brand associations Perceived quality Brand awareness Proprietary assets
  25. 25. Creating Brand Equity Aaker Model – Brand Identity Brand-as-product Brand-as-person Brand-as-symbol Brand-as-organization Four perspectives ……
  26. 26. <ul><li>Brand-as-product : Product scope, attributes, quality/value, uses, </li></ul><ul><li>users and country of origin. </li></ul><ul><li>Brand-as-organization : Organizational attributes, local versus global. </li></ul><ul><li>Brand-as-person : Brand personality, brand customer relationships. </li></ul><ul><li>Brand-as-symbol : Visual imagery/metaphors and brand heritage. </li></ul>Creating Brand Equity Twelve dimensions built around four perspectives ……
  27. 27. <ul><li>Brand identity is also seen as comprising of core identity and </li></ul><ul><li>extended identity . </li></ul><ul><li>Core identity represents the central, timeless essence of the brand. </li></ul><ul><li>It remains constant as the brand travels to new markets and </li></ul><ul><li>products. </li></ul><ul><li>The extended identity includes various brand identity elements </li></ul><ul><li>organized into cohesive and meaningful groups. </li></ul>Creating Brand Equity Core identity and extended identity ……
  28. 28. <ul><li>At the core of the model is the Brand Dynamics pyramid. </li></ul><ul><li>Brand building involves a series of sequential steps. The objectives </li></ul><ul><li>at each step in ascending order are: </li></ul><ul><li>Presence: Do we know about it? </li></ul><ul><li>Relevance: Does the brand offer us something? </li></ul><ul><li>Performance: Can it deliver? </li></ul><ul><li>Advantage: Does the brand offer something better than others? </li></ul><ul><li>Bonding: Nothing else beats it. </li></ul>Creating Brand Equity ‘ BRANDZ’ Model of Brand Strength
  29. 29. Creating Brand Equity The Brandz Model Bonding Advantage Performance Relevance Presence
  30. 30. <ul><li>The model also views brand building as an ascending series of steps from bottom to top. These are: </li></ul><ul><li>Ensuring identification of brand with customers and association of the brands in customers’ minds with specific product class/need. </li></ul><ul><li>Firmly establishing the totality of brand meaning in consumers’ minds by linking host of tangible and intangible brand associations. </li></ul><ul><li>Eliciting the proper consumer response in terms of brand related judgments and feelings. </li></ul>Creating Brand Equity ‘ Brand Resonance’ model
  31. 31. <ul><li>Converting brand response to create an intense, active loyalty relationship between consumer and the brand. </li></ul><ul><li>Enacting the four steps involves six ‘Brand building blocks’. </li></ul><ul><li>Brand salience , relates to how often and easily the brand is evoked under various purchase and consumption situation. </li></ul><ul><li>Brand performance , relates to how the product meets the needs. </li></ul><ul><li>Brand imagery , deals with extrinsic properties of the products, including the ways to meet the psychological/social needs. </li></ul>Creating Brand Equity
  32. 32. <ul><li>Brand judgments , focus on customers’ own personal opinions and evaluations. </li></ul><ul><li>Brand feelings , are customers’ emotional responses and reactions with respect to the brand. </li></ul><ul><li>Brand resonance refers to the nature of the relationship that customers have with the brand and the extent to which the customers feel that they are in ‘sync’ with the brand. </li></ul>Creating Brand Equity
  33. 33. Creating Brand Equity Brand Resonance Pyramid
  34. 34. Creating Brand Equity Drivers of Brand Equity Brand Elements Marketing Activities Meaning Transference
  35. 35. <ul><li>The first set of brand equity driver is the initial set of the brand elements or identities making up the brand. </li></ul><ul><li>The second set is the product, service and all accompanying marketing activities and supporting marketing programmes. </li></ul><ul><li>The final set of brand equity driver includes other associations indirectly transferred to the brand by linking it to some other entity like person, place or thing. </li></ul>Creating Brand Equity
  36. 36. Creating Brand Equity Brand Elements Elements Slogans Brand names URLs Logos Symbols Characters
  37. 37. <ul><li>Brand elements are those trademarkable devices that serve to identify and differentiate the brand. </li></ul><ul><li>Most strong brands employ multiple brand elements. </li></ul><ul><li>The brand building ability of these elements is what consumers would think or feel about the product if they only knew only about the brand element. </li></ul><ul><li>A brand element that provides a positive contribution to brand equity is one where consumers assumed or inferred certain valued associations or responses. </li></ul>Creating Brand Equity
  38. 38. Creating Brand Equity Brand Element choice criteria <ul><li>Memorable </li></ul><ul><li>Meaningful </li></ul><ul><li>Likeability </li></ul><ul><li>Transferable </li></ul><ul><li>Adaptable </li></ul><ul><li>Protectible </li></ul>
  39. 39. <ul><li>Designing Holistic Marketing Activities </li></ul><ul><li>The primary input to building brand equity comes from the product </li></ul><ul><li>or service and the supporting marketing activities. </li></ul><ul><li>Consumers come to know a brand through a range of contacts and </li></ul><ul><li>touch points. </li></ul><ul><li>A brand contact is any information bearing experience a consumer </li></ul><ul><li>has with the brand, the product category or the market related to </li></ul><ul><li>the product. </li></ul><ul><li>Marketers create brand contacts through many avenues such as </li></ul><ul><li>trade shows, event marketing, sponsorship and public relations. </li></ul>Creating Brand Equity
  40. 40. <ul><li>Leveraging Secondary Associations </li></ul><ul><li>The final way to build brand equity is to “borrow”. </li></ul><ul><li>It involves linking brand associations to other entities that have </li></ul><ul><li>their own associations, thus creating secondary brand associations. </li></ul><ul><li>Brand equity is created by linking the brand to other information </li></ul><ul><li>stored in consumers’ memory that conveys meaning to consumers. </li></ul>Creating Brand Equity
  41. 41. Secondary Sources of Brand knowledge Creating Brand Equity
  42. 42. <ul><li>Recap: </li></ul><ul><li>Know what is brand and how branding works. </li></ul><ul><li>Know what is brand equity. </li></ul><ul><li>Know how brand equity is built, measured, and managed. </li></ul>Creating Brand Equity