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Simona Eidukaityt

CBL Homework 1

Core issue: Brand equity

Problem statement: How to build brand equity?
Brand equity is the value that your brand brings to your company. You can measure it in a
number of ways, such as the price premium you can charge over a no-name product, or
long-term customer loyalty. One way to strengthen your customers perception of your
brand is to apply the Customer Based Brand Equity Model created by Kevin Lane Keller, a
marketing professor and author of the textbook, Strategic Brand Management. These steps
build from a base to form a brand equity pyramid.

Learning goals:
1. What is brand equity? Why is brand equity important?
'Brand equity' is a phrase used in the marketing industry which describes the value of having a well-
known brand name, based on the idea that the owner of a well-known brand name can generate more
revenue simply from brand recognition; that is from products with that brand name than from
products with a less well-known name, as consumers believe that a product with a well-known name
is better than products with less well-known names (Keller, 2003).

Some marketing researchers have concluded that brands are one of the most valuable assets a
company has, as brand equity is one of the factors which can increase the financial value of a brand
to the brand owner, although not the only one. Elements that can be included in the valuation of
brand equity include (but not limited to): changing market share, profit margins, consumer recognition
of logos and other visual elements, brand language associations made by consumers, consumers'
perceptions of quality and other relevant brand values (Grannell, 2009).

2. Explain the CBBE model and its steps. (Applying part pick your own company)
Keller's Brand Equity Model is also known as the Customer-Based Brand Equity (CBBE) Model. The
concept behind the Brand Equity Model is simple: in order to build a strong brand, you must shape
how customers think and feel about your product. You have to build the right type of experiences
around your brand, so that customers have specific, positive thoughts, feelings, beliefs, opinions, and
perceptions about it. When you have strong brand equity, your customers will buy more from you,
they'll recommend you to other people, they're more loyal, and you're less likely to lose them to
competitors. The model, seen in picture, illustrates the four steps that you need to follow to build
strong brand equity (Keller, 2003).
Simona Eidukaityt
CBL Homework 1

The four steps of the pyramid represent four fundamental questions that your customers will ask
often subconsciously about your brand. The four steps contain six building blocks that must be in
place for you to reach the top of the pyramid, and to develop a successful brand (Keller, 2003).

Step 1: Brand Identity Who Are You?

Brand Salience looks at creating awareness for the brand making sure it
stands out and that customers are aware of it. For a customer looking at
your brand, it answers the question, Who are you? to them. As a marketer
at this stage, you also have to know who your customers are and how they
decide between purchasing your product versus that of your competitors.
You have to make sure your target segment knows your USP and that the
way they perceive your brand is aligned with the way you want them to see it. An interesting fact to
note here is the way consumers make decisions in a top-down fashion. You first decide if you want
water or a flavoured beverage. Once you pick the latter, you decide if you want alcoholic and non-
alcoholic and so on (Keller, 2003). When you think of it this way, I believe soft drinks have a much
larger breadth of awareness as compared of milk or juices. While there are over 146 varieties of Coke
alone, there seems to be a lower perceived consumption of the other beverages in comparison
therefore, marketers in the latter beverage categories have to work doubly hard on brand salience.

Step 2: Brand Meaning What Are You?

To answer the second question, What are
you?, you have to identify and communicate
what your brand means. This question
focuses on the product itself, as it is the
primary influence of what consumers
experience with a brand. Brand performance
and Imagery are the two ways in which you
can achieve this. The former focuses on how
well your brand satisfies the functional needs
of the consumers namely utilitarian,
aesthetic and economic. Primary ingredients, supplementary features, product reliability and
durability, service effectiveness, style and design and of course, the price together influence brand
performance. Imagery is influenced by intangible aspects of the brand that stem from the consumers
experience with it, word of mouth or advertising (Keller, 2003). An incredibly powerful example of an
intangible association that I would like to mention here is how Dove resonates itself as a brand for
real women by emphasizing on family, real beauty, confidence and empowerment through its Real
Beauty campaigns. By combining performance and imagery, you can come up with a unique brand
personality that must be communicated to your consumers.

Step 3: Brand Response What Do I Think, or Feel, About You?

The third question, What about you?,
focuses on consumer responses to your
brand. As shown in the diagram, this can be
divided into Judgments and Feelings.
Judgments are opinions of consumers that
stem from their knowledge of the brands
performance and imagery. They can be
divided into brand credibility, brand
consideration, quality and superiority. Feelings are customers emotional responses and reactions to
the brand and can be divided into warmth, fun, excitement, security, social approval and self-
Simona Eidukaityt
CBL Homework 1

respect. Emotional branding is very important because connecting with customers on that level can
get you not only their attention but also their sympathy that could potentially make them loyal to your
brand (Keller, 2003). This short advertisement from British company Cadbury focuses on marketing its
primary popular chocolate, Dairy Milk, in India by positioning it around the countrys festival of lights
called Diwali. It urges customers to thank the people that have made a difference in their lives whether
it is a postman or a pizza delivery boy who work overtime to ensure timely delivery during the festival
by gifting them a Cadbury Dairy Milk box. The tagline in the end translates to, Who will you make
happy this Diwali?

Step 4: Brand Resonance How Much of a Connection Would I Like to Have With You?
The final question in the pyramid talks about the customers
ultimate relationship with the brand and the level of identification
associated with the same. This is commonly called Brand
resonance. This aspect can be broken down into Behavioural
loyalty, attitudinal attachment, sense of community and active
engagement (Keller, 2003). Apple manages to integrate these four
aspects very well in projecting its brand to the customers. As a
consumer, I have a strong resonance with Tropicana. I have been
loyal to the brands signature orange juice for many years now having built a certain attachment to it.
My immediate and extended families are all active buyers of the Tropicana brand and thus, help in
creating a sense of community around it.

3. What are the challenges and trends concerning brand equity?

When it comes to social branding there are two key challenges. First, a company must have a
clear definition of its brand and an authentic desire to have a positive impact on the world.
For many brands this could be a challenge, as motives and marketing have become so
fractured and there also exists a fear of leading an authentic conversation across social media
in case it invites too much scrutiny, accountability and, potentially, a PR crisis.
Brands also face the challenge of managing real-time messaging across a wide array of social
media channels where each has a specific focus and style of engagement. To effectively
manage engagement across these platforms, brands must invest in leadership, marketing and
employee training in social storytelling.

First, the future of profit is purpose The consumer base for every brand is now very aware
of the social crises we face and is looking to brands to be part of the solution.
Second, brands must be the chief celebrant, not celebrity, of their customer community
Only in doing so, can brands talk to consumers in a way that they will actually listen and earn
goodwill in return.
Third, a brand must be a mission with a company, not a company with a mission This shift
in focus empowers brands to lead cultural conversations that are relevant and meaningful to
consumers lives and inspire them to work with a brand to build its business and positive
4. What are the different forms of secondary brand association?
Simona Eidukaityt
CBL Homework 1

5. What are the pros and cons of celebrity endorsements? Focus on things that were
bad and explain why.
Companies like celebrities because people like celebrities, and customers who like a particular
celebrity also identify with that person in some way. Companies hire these individuals because they
believe it will favour their brands very well. Celebrities are also eye-catching; theres a pure awareness
factor that makes you stop and look at an advertisement because you recognize the spokesperson.
Thats very attractive to many companies. Stars are paid for these endorsements of course, and while
customers know this, they often feel as if the celebrity wouldnt take the money if he or she didnt like
the product (Mello, 2014).
The problem is that celebrities are human, and humans make mistakes. The danger of taking on a
celebrity is you cant control that person. Its a high-risk, high-reward situation. When it works, it works
fabulously. Michael Jordan was one of the greatest marketing success stories every written. When
Nike started the Be Like Mike campaign, some were sceptical, but wow did that work. There was a
huge upside for the company (Mello, 2014).
Were now seeing more companies make up their own celebrities, like creating cartoons or characters.
Take Geicos Gecko, for example. The Gecko wont be getting arrested or cheating on a spouse.
Customers can still develop an emotional connection with those characters, and the company is taking
much less risk. I think more and more, companies are reconsidering their celebrity portfolios. They
can write morals clauses in their contracts with celebrities, but the damage is usually done by the time
those clauses are revisited (Mello, 2014).

Indian superstar Shahrukh Khan, also known as King Khan, got in a lot of hot water with his
fans when he endorsed a fairness cream for men. He led many to believe that he was not
proud of the color of his skin. Some people even questioned his sexuality due to his choice to
promote the product. Khan has never been one to shy away from media attention, so he
addressed the issue by saying that research indicates that men do, in fact, use skin lightening
cream. Khan also said that he doesnt think theres anything wrong with that, and wouldnt
endorse anything he didnt agree with. The star went on to explain that he wasnt trying to
imply that any complexion was better than another by partnering with the fairness cream
company (Shondell, 2015).

Grannell, C. (2009). Untangling Brand Equity, Value and Health.
Keller, K. L. (2003). Brand Synthesis: The Multidimensionality of Brand Knowledge (Vol. 29).
Mello, J. (2014, April 6). The Pros and Cons of Celebrity Marketing. Retrieved from
Shondell, A. (2015, September 29). 12 Celebrity Endorsement Deals Gone Terribly Wrong.
Retrieved from TheRichest: