Customer based Brand equity

Brand Equity
Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name. Brand Equity the added values endowed to product or service

Customer based Brand Equity

Customer based band equity: is the differential effect that brand knowledge has on consumer response to the marketing of that brand.

Concept of Customer based Brand Equity

Customer-based brand equity

Differential effect Customer brand knowledge Customer response to brand marketing A brand has 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 not.

Concept of Customer based Brand Equity

Customers will be more accepting of a new brand extension for a brand with positive customer based brand equity. Less sensitive to price increases And withdrawal of advertising effort And more willing to seek the brand in a new distribution channel.

Concept of Customer based Brand Equity

A brand has negative customer based brand equity if consumers react less favorably to marketing activity for the brand compared with an unnamed or fictitiously named version of the product.

Concept of Customer based Brand Equity

Differential effect : brand equity arises out of differences in consumer responses. The difference in response are a result of consumers knowledge about the brand, what they have learned, felt, seen and heard about the brand . Brand equity ultimately depends on what resides on the minds of the consumers.

Concept of Customer based Brand Equity

Customers differential responses which makes brand equity are reflected on : Perceptions Preferences and behaviour related to all aspects of brand marketing.

Customer based brand equity model

ConsumerBrand Resonance
INTENSE, ACTIVE LOYALTY

Consumer Judgments

Consumer Feelings

RATIONAL & EMOTIONAL REACTIONS

Brand Performance

Brand Imagery

POINTS-OFPARITY & POINTS-OFDIFFERENCE

Brand Salience

DEEP, BROAD BRAND AWARENESS

Brand equity as a bridge

Brand as a reflection of the past: Quality of investment in brand building is the most critical factor, not the quantity. Brand as a direction for the future.

Making a brand strong: Brand knowledge

Brand knowledge is the key to creating brand equity, because it creates the differential effect that drives brand equity. Brand knowledge consists of a brand node in memory with a variety of associations linked to it. (Associated network memory model)

Making a brand strong: Brand knowledge

Brand knowledge structures depend on . . .

The initial choices for the brand elements The supporting marketing program and the manner by which the brand is integrated into it Other associations indirectly transferred to the brand by linking it to some other entities

Brand knowledge making a brand strong

Brand knowledge consists of 2 components Brand awareness and Brand image Brand awareness : strength of the brand node or trace in memory which can be measured as the consumers ability to identify the brand under different conditions.

Brand knowledge making a brand strong

Brand image : is consumers perceptions about a brand as reflected by the brand associations held in consumer memory. Brand associations for Apple computers User friendly, macintosh,Creative, Eg : Mc Donalds- Quality, service, cleanliness and value, convenience, Ronald Mc Donald,for kids

Sources of brand equity

Customer based brand equity occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable and unique associations in memory. Brand awareness consists of Brand recognition Brand recall

Sources of brand equity

Brand recognition :is consumers ability to confirm prior exposure to the brand when given the brand as a cue. Brand recall:is the consumers ability to retrieve the brand from memory when given the product category, the needs fulfilled by the product category or a purchase or usage situation as a cue.

Sources of brand equity

If consumer decisions are made at the point of purchase, then brand recognition is more important. If consumer decisions are mostly based on settings away from the point of purchase, then brand recall is more important. Eg : Services, Online brands. Consumers must actively seek the brand ad retrieve it from memory when appropriate.

Sources of brand equity

Brand evaluations and choices depend on the brand recall.

Advantages of brand awareness

Learning advantages: Brand awareness helps in the formation and strength of the associations that make up the brand image. Consideration advantages Raising brand awareness increases the likelihood that the brand will be a member of the consideration set. Choice advantages

Establishing Brand awareness

Creating brand awareness means increasing the familiarity of the brand through repeated exposure. Repetition increases reconcilability, by improving brand recall. Creating a positive brand image takes marketing programs that link strong, favorable,and unique associations to the brand in memory.

Establishing Brand awareness

Advertising, promotion , sponsorship , event marketing, publicity and public relations and outdoor advertising can increase familiarity and awareness of that brand element. Repetition increases brand recognizabilty. Brand recall requires linkages in memory to appropriate product categories. Jingle, logos, characers, packaging aid recall.

Strength of brand associations

Depents on Brand attributes : are those descriptive features that characterizes a product or service. Brand benefits : are the personal value and meaning that consumers attach to the product or service.

Building a strong brand

Who are you? ( brand identity) What are you ? ( Brand meaning) What do I think or feel about you?(Brand response) What kind of an association or how much of connection would I like to have with you?(Brand relationships)

Customer based brand equity model

ConsumerBrand Resonance
INTENSE, ACTIVE LOYALTY

Consumer Judgments

Consumer Feelings

RATIONAL & EMOTIONAL REACTIONS

Brand Performance

Brand Imagery

POINTS-OFPARITY & POINTS-OFDIFFERENCE

Brand Salience

DEEP, BROAD BRAND AWARENESS

Building a strong brand

Convert brand response to create an intense, active loyalty relationship between customer and the brand.(brand relationships)

Brand building blocks

Brand salience : measures awareness of the brand ie how often and how easily the brand is evoked under various situations or circumstances. Breadth and depth of awareness Depth of brand awareness : measures how likely it is for a brand elements come to mind and the ease with which it does so.

Brand building blocks

Breadth of awareness : measures the range of purchase and usage situations in which the brand elements comes to mind and depends on the organization of the brand and product knowledge category.

Beverage Category Hierarchy

Beverage

Water

Others

.
Non-Alcoholic Juices Milk Hot beverage Soft drinks ? Alcoholic Wine Beer
Distilled Spirits

Product category structure

The product hierarchy shows that not only the depth of awareness matters but also the breadth. A highly salient brand is one that has both depth and breadth of brand awareness

Resonance

4 relationship

Judgments

Feelings

3. response

Performance

Imagery 2.Meaning

Salience
1.Identity

Building a Brand equity-4 steps

Brand salience : measures awareness of the brand ie how often and how easily the brand is evoked under various situations or circumstances. Breadth and depth of awareness Depth of brand awareness : measures how likely it is for a brand elements come to mind and the ease with which it does so.

Brand building blocks

Breadth of awareness : measures the range of purchase and usage situations in which the brand elements comes to mind and depends on the organization of the brand and product knowledge category.

Product category Beverages

Beverage Category Hierarchy Water Beverage Others

Non-Alcoholic Juices Milk Hot beverage Soft drinks ?

Alcoholic Wine Beer

Distilled Spirits

Strategic implications
The product hierarchy shows that not only the depth of awareness matters but also the breadth . A brand must not only be top of the mind but it must be available at the right times and places. Breadth is often neglected even for brands which are category leaders. Eg : campbells soup

Strategic implications
A highly salient brand is one that has both depth and breadth of brand awareness.

Brand performance
Describes how well the product or service meets customers functional needs. Attributes which underlie brand performance Primary ingredients and features Product reliability, durability and serviceability Style and design Price

Brand performance
Reliability : consistency of performance over time and from purchase to purchase. Durability: is the expected economic life of the product Serviceability:The ease of repairing the product if needed.

Brand performance Service

Customers have performance related associations with service. Service effectiveness : measures how well the brand satisfies customers service requirements. Service efficiency: describes the speed and responsiveness of service. Service empathy: The extent to which service providers are seen as trusting , caring .

Brand Imagery
Depends on extrinsic properties of the product or service and the ways in which the brand attempts to meet customers psychological or social needs. It is the way people think about a brand abstractly Imagery refers to the more intangible aspects of the brand.

Intangibles linked to a brand

User profiles Purchase and usage situations Personality and values History, heritage and experiences Nivea skin cream : family/shared experiences/maternal/multipurpose,classic/ti meless and childhood memories

Intangibles linked to a brand

Demographic factors Gender: Marlboro cigarettes Age : Pepsi cola Fuji films are considered younger than Coke, Kodak film Race Income :BMW, -Young affluent urban professionals.

Intangibles linked to a brand

Psychographic factors :attitudes towards life,careers, social issues

Brand judgments
They are customers personal opinions about and evaluations of the brand which consumers form by putting together all the different brand performance and imagery. Judgments about quality Brand quality Brand credibility Brand consideration Brand superiority

Brand judgments
Brand quality : Brand credibility : describes the extent to which customers see the brand credible in terms of Perceived expertise Trustworthiness Likability

Brand judgments
Brand expertise : competent, innovative and a market leader. Band trustworthiness: dependable and keeping customers interests in mind. Brand Likabilty: fun, interesting and worth spending time with.

Brand judgments
Brand consideration: depends on how personally relevant customers find the brand and is a crucial filter in terms of brand equity.
. Brand superiority : The extent to which customers view the brand as unique and better than other brands.

Brand feelings
The customers emotional responses and reactions to the brand Warmth: Hall mark cards Fun: Disney Excitement:MTV Security:insurance Social approval:Mercedes Self respect:

Brand Resonance
Describes the nature of relationships and the extent to which customers feel that they are Insync with the brand. Eg : Harley Davidson Resonance is characterized in terms of intensity or the depth of the psychological bond that customers have with the brand.

Brand Resonance
Can be classified into 4 categories Behaviour loyalty Attitudinal attachment Sense of community Active engagement

Brand Resonance
Behaviour loyalty : in terms of repeat purchases and the amount or share of category volume attributed to the brand. Sense of community : identification with a brand community through which customers feel an affiliation with other people associated with the brand.

Brand Resonance
Apple Harley Davidson Jeep

Apple computers
Apple encourages owners of its computers to form local Apple user groups. By 2005, there were over 700 groups User groups provide Apple owners with opportunities to learn more about their computers , share ideas

Harley Davidson
Sponsors the Harley owners Group (HOG). In 2005, it has 900,000 members all over the world. Mission To ride and have fun First time buyer gets a free membership of one year. Membership gives previlege to a magazine Hog Tales, a touring handbook, emergency road service .

Harley Davidson
Company also maintains an extensive website devoted to HOG Includes information about club chapters and events and features a special members only section.

Brand Positioning
The act of designing the companys offer and image so that it occupies a distinct and valued place in the target customers mind.
Its all about identifying the optimal location of a brand and its competitors in the minds of consumers to maximize potential benefit to the firm.

Cond.

It helps to guide marketing stategy by clarifying what a brand is all about. How it is unique and how it is distinct from competitive brands.

Eg : Pepsi One
Pepsi originally positioned Pepsi One as a fully flavoured yet healthy alternative. It was an alternative to regular colas and targeted 20 30 year old men who did not like the taste of diet colas. The first slogan was Tue cola taste one calorie 1999 replaced it with Tasted more like regular colas

After 18 months , Pepsi achieved a 0.8% share. Company cited poor positioning as the reason for its lack of success. Customers didnt understand how Pepsi one is different from other diet colas. 2000: Too good to be one calorie .. But it is.

Frame of reference
Positioning requires a frame of reference Who the target customer is Who the main competitors are How the brand is similar to its competitors How the brand is dissimilar to competitors.

Target market
Different customers may have different brand knowledge structures and thus different perceptions and preferences. It enables the marketers to understand which brand associations should be strongly held, favorable and unique.

Segmentation bases
Behavioral User status, Usage rate, usage occasion,Brand benefits sought. Demographic : Income, age,sex, race, family. Psychogaphic: Values, opinions, attitudes, lifestyle. Geographic : International, regional Nature of good: Buying condition :purchase location, who buys.

Behavioral segmentation Tooth paste

Sensory segment: seeking flavour and product appearance. Sociables: seeking brightness of teeth. Worriers: seeking decay prevention Independent segment : seeking low price.

Nature of competition
Competitive analysis considers resources, capabilities, and intentions of various other firms which helps marketers to choose markets where consumers can be profitably served.

Competition should not be narrowly defined.eg : Noncola flavoured soft drinks

Point of difference(POD)
POD are strong, favorable and unique brand associations for a brand. PODs are attributes or benefits that consumers strongly associate with a brand. Positively evaluate and believe that they could not find the same extent with a competitive brand.

Points of Parity
Those associations that are not necessarily unique to the brand but may infact be shared with other brands. 2 types Category type associations Competitive type associations.

Category points of parity

Are those associations that consumers view as being necessary to be a legitimate and credible offering within a certain product or service category. Eg : Nivea became a leader in the skin cream category by creating strong points of difference on the benefits of gentle,protective and caring.

They launched brand extensions into deodorants, shampoos and cosmetics. Nivea found it necessary to establish category points of parity before they promote their brands point of difference.

Competitive

points of parity

Are those associations designed to negate competitors points of difference. If a brand can break even in those areas where its competitors are trying to find an advantage , the brand should be in strong, unbeatable competitive position. Eg : Miller Lite Philip Morris