Marketing Management

Building Strong Brands and Creating Brand Equity

Reporter: Tefanny F. Pesons

Subject: BM 207
Professor: Sir Roel A. Monsanto
Date Submitted: August 5, 2018
 BUILDING STRONG BRANDS AND CREATING BRAND EQUITY
I. Brand
A. Definition. Brand is a name, term, sign, symbol, design, or some combination of these
elements, intended to identify the goods and services of one seller or group of sellers and
to differentiate them from those competitors. Brands are valuable intangible assets that
offer a number of benefits to customers and firms and need to be managed carefully.
B. Role of Brands
1. Identify the source or maker of a product and allow consumers to assign
responsibility for its performance to a particular manufacturer or distributor.
2. Perform valuable functions for firms.
a) They simplify product handling or tracing.
b) Offers the firm legal protection for unique features or aspects of the
product – trademark, patents, copyrights and proprietary designs.
c) Represents enormously of legal property that can influence consumer
behavior and provide owner the security of sustained future revenues.
3. Signals a certain level of quality so that satisfied buyers can easily choose the
product again (brand loyalty) and can be a powerful means to secure a
competitive advantage.
C. Scope of Branding. Physical good, service, a person, a place, an organization or an idea.
II. Brand Equity
A. Definition. The added value endowed on products and services. It may be reflected in the
way consumer thinks, feel, and act with respect to the brand, as well as in the prices,
market share, and profitability the brand commands.
B. Customer-based Brand Equity
1. Brand equity arises from differences in consumer response.
2. Differences in response are a result of consumers’ brand knowledge. Brands
must create strong, favorable, unique brand associations with customers.
3. Brand equity is reflected in perceptions, preferences, and behavior related to all
aspects of the marketing of a brand.
C. Brand Equity Models
1. BrandAsset® Valuator (BAV)

Building Strong Brands and Creating Brand Equity | 1

 2. BrandZ Model – BrandDynamics™ Pyramid

3. Brand Resonance Model

D. Building Brand Equity

Building Strong Brands and Creating Brand Equity | 2

 1. Choosing brand elements.
a) Criteria – memorable, meaningful, likable, transferable, adaptable,
protectable.
b) Developing brand elements – easy to recall and inherently descriptive and
persuasive; increase awareness and associations; capture intangible
characteristics
2. Designing holistic marketing activities.
a) Advertising
b) Brand contact - trade shows, sponsorship, clubs and consumer
communities, factory visits, public relations and press releases
c) Integrated – mixing & matching (Internal Branding & Brand Communities)
3. Leveraging secondary associations.

E. Measuring Brand Equity (Brand Value Chain)

1. Indirect approach – assesses potential sources of brand equity by identifying and
tracking consumer brand knowledge structures.
2. Direct approach – assesses the actual impact of brand knowledge on consumer
response to different aspects of marketing.
F. Brand Worth. The net present value of the future earnings that can be attributed to the
brand alone.
1. Market Segmentation
2. Financial Analysis
3. Role of Branding
4. Brand Strength
Building Strong Brands and Creating Brand Equity | 3
 5. Brand Value Calculation
G. Managing Brand Equity
1. Brand Reinforcement – consistently conveying the brand’s meaning in terms of:
a) What products it represents, what core benefits it supplies, and what
needs it satisfies; and
b) How the brand makes product superior, and which strong, favorable, and
unique brand associations should exist in consumers’ minds.
2. Brand Revitalization – “back to basics” and reinvention
III. Branding Strategy
A. Definition. Often called the brand architecture – reflects the number and nature of both
common and distinctive brand elements. Three main choices:
1. It can develop new brand elements for the new product.
2. It can apply some of its existing brand elements.
3. It can use a combination of new and existing brand elements.
B. Branding Decisions
1. Alternate branding strategies.
a) Individual or separate family brand names.
b) Corporate umbrella or company brand name.
c) Sub-brand name.
2. House of brands versus a branded house
C. Brand Portfolios. The set of all brands and brand lines a particular firm offers for sale om a
particular category or market segment.
1. Flankers – or “fighter” brands are positioned with respect to competitors’ brands
so that more important flagship brands can retain their designed positioning,
2. Cash Cows – some brands may be kept around despite dwindling sales.
3. Low-end Entry Level – to attract customers to the brand franchise (traffic builders)
4. High-end Prestige – add prestige and credibility to the entire portfolio.
D. Brand Extensions
1. Advantages – (a) improved odds of new-product success (b) positive feedback
effects
2. Disadvantage – (a) Line-extension trap (b) Brand dilution

Building Strong Brands and Creating Brand Equity | 4

 3. Success Characteristics:
a) Does the parent brand have strong equity?
b) Is there a strong basis of fit?
c) Will the extension have the optimal points-of-parity and points-of-
difference?
d) How can marketing programs enhance extension equity?
e) What implications will the extension have for parent brand equity and
profitability?
f) How should feedback effects best ne managed?
IV. Customer Equity
A. Definition. Complementary concept to brand equity that reflects the sum of lifetime values
of all customers for a brand. Customer lifetime value is affected by the costs of customer
acquisition, retention and cross-selling.
B. Brand Equity and Customer Equity

Perspectives Difference or Focus Common

Customer Equity Bottom-line financial value
Importance of customer loyalty.
Brand Equity Brands specifically marketing activities

“A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.” –
Scott Cook

Building Strong Brands and Creating Brand Equity | 5