Customer-Based Brand Equity

Motivation for Customer-Based Brand Equity Model



Marketers know strong brands are important but arent always sure how to build one. CBBE model was designed to be
comprehensive cohesive well-grounded up-to-date actionable

Rationale of Customer-Based Brand Equity Model



Basic premise: Power of a brand resides in the minds of customers Challenge is to create the right brand knowledge structures - ensure customers have the right types of experiences with products and services through their marketing programs:
Thoughts Feelings Images Perceptions Attitudes
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Building Customer-Based Brand Equity

The CBBE model provides  Branding ladder - building a strong brand involves a series of steps  Building blocks - strong brand is characterized by a logically constructed building blocks


Reinforces a number of branding tenets

1. 2. 3. 4. 5.

Customers own brands Dont take short cuts with brands Brands should have a duality rational and emotional Brands should have richness - resonance Brand resonance provides important focus
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CBBC Model is Useful

CBBC model is useful as Road map /guidance for brand building Yardstick to assess progress / weaknesses and strengths Guide for marketing research effort

The Concept of CBBE

Customer-based brand equity can be
 

Positive CBBE - gets a positive response from consumers Negative CBBC - evokes a negative response Differential effect on consumer response to the marketing of the brand (because of brand knowledge),
(if there is no differential effect, it is a commodity and competition will be based on price)

CBBE has 3 key ingredients

1.

2.

3.

Because of Customer brand knowledge the result of marketing and previous experience with the brand Which causes Customer response to brand marketing reflected in the perception, preferences and behavior related to all aspects of the marketing

Brand Equity as a Bridge



CBBE represents the added value endowed to a product as a result of past investments in the marketing of a brand.
Hence CBBE provides direction and focus to future marketing activities


It provides focus and guidance to interpret the past marketing programs and design of future marketing programs

Brand Equity as a Bridge

Customer knowledge provides a vital bridge from the past to the future
BE as a reflection of the past all past expenditure are either good or bad brand investments
Quality of investment is more important than quantity (can over spend if the money is not spent wisely)

BE as direction for the future Consumers decide where the brand can go and where it cannot because of brand knowledge created over time - dictates the future direction for the brand..
The true value and Future prospects of the brand rests with the consumer

Consumer-Based Brand Equity Framework

Brand Recognition Brand Awareness
Non-Product-Related (e.g., Price, Packaging, User and Usage Imagery)

Brand Recall

Attributes
Product-Related (e.g., color, size, design features)

Brand Knowledge Types of Brand Associations Brand Image Favorability, Strength, and Uniqueness of Brand Association Benefits

Functional Symbolic

Overall Evaluation (Attitude)

Experiential

Sources of BE - Determinants of CBBE

Brand Knowledge - key to differential effect that creates / drives BE  The associative network memory model
BK is considered a node in memory with a variety of associations Brand associations are the other nodes that are linked to the brand node in memory (about the product and aspects independent of it)


The associations are categorized as Brand awareness and familiarity strength of the memory
 

The ability to identify the brand and recall it and To recall it under many different conditions a perception about a brand as reflected by the band associations

Brand Image is consistent with an associative memory model



Brand Associations vary by groups

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of:
1.


Awareness and familiarity with the brand

In some cases this alone may be adequate, but in other cases

2.

Strong, favorable, and unique brand associations (brand Image) in memory determines the differential response (meaningful differences) which makes up BE.

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of: 1. Brand Awareness consists of Brand recognition ability to confirm prior exposure to the Brand, given the brand as a cue Important when decisions are made in the store Brand Recall ability to retrieve the brand from memory when given a brand association cue - the product category, the needs fulfilled, purchase situation Important when brand is not present and it has to be actively sought on-line brands, critical services etc
Relative importance of recognition and recall depends on whether - product related decision is taken with product present or absent

It is easier to recognize than recall.

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of:
1. Brand awareness Consequences important role in consumer decision making for 3 reasons
1.

Learning Advantage for formation of brand associations Consideration advantage puts brand on the consideration set Choice advantage particularly with Low involvement goods

2.

3.

Sources of BE - Determinants of CBBE

Consequences of Brand awareness important role in consumer decision making for 3 reasons
1.

Learning Advantages influences the formation of brand associations that make up the brand image. The nature of the brand node affects the different kinds of associations to become attached in memory It is the first step in building BE and the choice of brand elements make the process easier or more difficult

Sources of BE - Determinants of CBBE

Consequences of Brand awareness plays an important role in consumer decision making for 3 reasons
2.

Consideration Advantages thinking of the brand, when making purchase decisions, when the brand is acceptable. Raising awareness increases the likelihood of the brand being on the consideration set. (Part-list-cuing says it reduces the likelihood of other brands not being there)

Sources of BE - Determinants of CBBE

Consequences of Brand awareness important for 3 reasons
3. Choice advantage affects choice in the consideration set even when there are no other associations to those brands. (Consumers buy well established brands) In low-involvement situations - Minimum levels of brand awareness may be adequate to produce choice even in the absence of well formed attitudes (In low-involvement situations consumers 1. Lack purchase motivation- does not care about the product - gasoline
2.

Lack purchase ability to judge product quality. Heuristics (shortcut) will be used and the brand which they are familiar with will be chosen)

Sources of BE - Determinants of CBBE

Establishing brand awareness

Repeated exposure through IMC

 

increases familiarity with the brand. useful for brand recognition more than for brand recall (Important to reinforce brand name with all brand elements)

For increased recall the brand requires linkages in memory of

 

appropriate product category other situational purchase or consumption cues

(using a slogan or jingle can creatively do this along with the other brand elements)

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of: 2. Brand Image created by


Marketing programs that link strong favorable associations to the brand in memory And other sources of information
    

Marketer controlled sources of info Distribution channel, company, person, place or events Info from other sources / WOM Brand Experience Assumptions and inferences from the brand

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of: 2.Brand Image
1.

Strength of Brand Associations Consumer beliefs about brand attributes are formed in may ways 

Personal experience information creates the strongest brand attributes and benefit association (important to decision making) WOM and other non-commercial sources of information forms the next strongest associations Company created sources of information creates weakest associations (advertising)

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of:
2. Brand Image is created by marketing programs that link strong favorable associations
1.

Strength of Brand Associations depends on how marketing programs affect brand experience
quantity and quality of processing (more deeply a person thinks about the information and relates it to existing brand knowledge, stronger the associations)

Sources of BE - Determinants of CBBE

CBBE occurs when consumer has a high levels of:
2. Brand Image is created by marketing programs that link strong favorable associations
1.

Two factors affect the strength of the associations

1. 2.

Relevance of the information Consistency with which the information is presented over time

Recall and salience of brand depends on particular associations

1. 2.

The context in which the brand is considered and The retrieval cues that are present and serve as reminders

Sources of BE - Determinants of CBBE

Brand Image
1.

Strength of Brand Associations depends on how marketing programs affect brand experience


Companies create strong brand associations through a variety of means Creative communication - brand related information is related to existing knowledge Repeated exposure - over time and space, so that retrieval cues are present as reminders All marketing programs and brand activities chosen must affect the strength of brand associations

Sources of BE - Determinants of CBBE

Brand Image
2.

Favorability of Brand Associations associations desirable to the consumer, delivered effectively

Desirability depends on 3 factors
1. 2. 3.

How relevant consumers find the brand associations How distinctive they find the association How believable they find the associations

Deliverability depends on 3 factors

1. 2. 3.

Actual and potential ability of the product to perform Current or future prospects of communicating the performance Sustainability of the actual or communicated performance over time.

Effectively delivered
Cost of delivery, and Time necessary for to create / change desired associations?

Sources of BE - Determinants of CBBE

Brand Image is created by marketing programs
1.

Unique brand associations should not give reasons for customers not to buy the brand therefore consider both 

Points of difference - meaningful points of difference the reason to buy - the associated USP Points of parity be as good as the competition on other associations (to negate the potential points of difference of competitors)

Sources of BE - Determinants of CBBE

Brand Image is created by marketing programs 1. Unique brand associations - sustainable competitive advantage USP brand positioning
1.

USP - product related / non product related attributes or benefits (user type, usage situations)
Differences can be communicated
explicitly by direct comparison with competitors Or implicitly highlighted without a competitive point of reference

2. Shared associations with competition helps establish

Category membership and scope of the competition Shares the Product category attitude - specific beliefs and attitudes towards the category as a whole or a member of the category also become brand associations

Sources of BE - Determinants of CBBE

Brand Image is created by marketing programs Unique brand associations valuation is  

situation and context dependent and varies according to consumer goals

Not all associations are viewed as important, or viewed by consumers (Color of Fed Ex) Nor are they equally valued across all purchase or consumption occasions (Christmas cards by Fed Ex)

CUSTOMER-BASED BRAND EQUITY PYRAMID

4. RELATIONSHIPS = RESONANCE What about you & me?

3. RESPONSE = JUDGMENTS FEELINGS What about you?

2. MEANING = PERFORMANCE IMAGERY What are you?

1. IDENTITY =

SALIENCE

Who are you?

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Salience Dimensions


Depth of brand awareness

Ease of recognition and recall Strength and clarity of category membership

Breadth of brand awareness with varied

Purchase consideration Consumption consideration

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Performance Dimensions


Primary characteristics and supplementary features Product reliability, durability, and serviceability Service effectiveness, efficiency, and empathy Style and design Price

   

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Imagery Dimensions


User profiles Demographic & psychographic characteristics Actual or aspirational Group perceptions - popularity Purchase & usage situations Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc.), location, context of usage Personality & values Sincerity, excitement, competence, sophistication, ruggedness History, heritage, & experiences Nostalgia Memories
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Judgment Dimensions


Brand quality Value Satisfaction Brand credibility Expertise Trustworthiness Likability Brand consideration Relevance Brand superiority Differentiation

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Feelings Dimensions
     

Warmth Fun Excitement Security Social approval Self-respect

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Resonance Dimensions


Behavioral loyalty Frequency and amount of repeat purchases Attitudinal attachment Love brand (favorite possessions; a little pleasure) Proud of brand Sense of community Kinship Affiliation Active engagement Seek information Join club Visit web site, chat rooms
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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

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Sub-Dimensions of CBBE Pyramid

LOYALTY ATTACHMENT COMMUNITY ENGAGEMENT

QUALITY CREDIBILITY CONSIDERATION SUPERIORITY

WARMTH FUN EXCITEMENT SECURITY SOCIAL APPROVAL SELF-RESPECT

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

CATEGORY IDENTIFICATION NEEDS SATISFIED

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Application: Identify the key drivers of brand equity

Performance

0.65

Judgment
0.49

0.17

0.66

Resonance

Imagery

0.24

0.58

Feelings

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Building Customer-Based Brand Equity



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