Chapter

A. Brands and brand management

In our increasingly complex world everyone faces more choices to make but has less time to make them.
Therefore a brand’s ability to simplify decision making, reduce risk, and set expectations is invaluable.

What is a brand?

Brand (American Marketing Association definition) = a name, term, sign, symbol, or design, or a
combination of them, intended to identify the goods and services of one seller or group of sellers and to
differentiate them from those of competition. Whenever a marketer creates a new name, logo, or symbol
for a new product, a new brand has been created.

A brand can also be considered something that has created a certain amount of awareness, reputation,
prominence, and so on in the marketplace. This is the industry concept of a brand, called ‘Brand with a big
B’, while the AMA definition is the definition with a small b. The key to creating a brand is being able to
choose the right brand elements (name, logo, etc.).

Product = anything we can offer to a market for attention, acquisition, use, or consumption that might
satisfy a need or want. It may be a physical good, a service, a type of store, a person, an organization, a place,
or even an idea. Five levels of meaning for a product are defined:

1. Core benefit level = the fundamental need or want that consumers satisfy by consuming the
product or service;
2. Generic product level = a basic version of the product containing only those attributes or
characteristics absolutely necessary for its functioning but with no distinguishing features
(stripped-down, no frills version);
3. Expected product level = a set of attributes/characteristics that buyers normally expect and
agree to when they purchase a product;
4. Augmented product level = includes additional attributes/benefits/services that distinguish the
product from those of competitors;
5. Potential product level = includes all the augmentations and transformations that a product
might ultimately undergo in the future.

In many markets most competition takes place at the augmented product level. At that level, firms can
successfully build satisfactory products at the expected product level. Levitt argued that the new
competition is not between what companies produce, but between what they add to their factory output in
the form of packaging, services, advertising, customer advice, and other things that people value. Therefore
a brand is more than a product, because it can have dimensions that differentiate it from other products
that satisfy the same need.

Some brands create competitive advantages with product performance by steadily investing in R&D and
mass marketing. Other brands create competitive advantages through non-product related means, e.g. by
creating appealing images surrounding their products. Especially strong brands carry various different
types of associations, which marketers have to account for when making marketing decisions. There are
many different ways to create such associations. By creating perceived differences among products through
branding and by developing a loyal consumer franchise, marketers create value that can translate to
financial products for the firm. Most valuable are intangible assets such as management skills, marketing,
financial and operations expertise and of course the brand itself.

Why do brands matter?

Consumer = all types of customers, including individual citizens as well as organizations. To consumers,
brands identify the source/maker of a product, thereby allowing them to assign responsibility to a
particular manufacturer/distributor. Based on past experiences and marketing programs, consumers find
out which brand satisfies them. They use this information to simplify their product decisions because when
they already know a brand and like it, they do not necessarily have to consider all other brands available
for purchase. This way, the consumer’s search costs for products both internally (how much he has to think)
and externally (how much he has to look around) are lowered. Consumers trust a brand and become loyal
to it with the implicit understanding that the brand will behave in certain ways and provide them utility
through consistent product performance and appropriate pricing, promotion, and distribution programs
and actions. As long as consumers are satisfied with a product, they are likely to continue to buy it.

Brands can allow consumers to project their self-image (serve as symbolic devices) and allow consumers
to communicate to others the type of person they are by reflecting different values or traits. Brands and
their attributes can be classified into three categories:

• Search goods = consumers can evaluate product attributes like color, size, style, design, and
weight by visual inspection (e.g. groceries);
• Experience goods = consumers cannot assess product attributes like durability, ease of handling,
and safety easily by inspection, so have to try/experience the product (e.g. car tires);
• Credence goods = consumers may rarely learn product attributes (e.g. insurance coverage).

Brands can be indicators of quality and other characteristics, and can reduce risks in product decisions.
Types of risk are:

• Functional risk = the product does not perform up to expectations;

• Physical risk = the product poses a threat to the physical well-being of the user/others;
• Financial risk = the product is not worth its price;
• Social risk = the product results in embarrassment from others;
• Psychological risk = the product affects the mental well-being of the user;
• Time risk = the failure of the product results in an opportunity cost of finding another satisfactory
product.

One way for consumers to handle these risks is to buy well-known brands with which they have had
favorable experiences. The special meaning that brands take on can change consumers’ perceptions and
experiences with a product. They may evaluate identical products differently because of the brands they
carry. Brands take on personal meanings to consumers and as their lives become more complicated, they
use brands in order to simplify their decision making and to reduce risk.

To firms, brands fundamentally serve an identification purpose (to simplify product handling/tracing).
Operationally, they help organize inventory and accounting records. A brand also offers the firm legal
protection for unique features of the product and can retain intellectual property rights, ensuring that the
firm can safely invest in a brand and reap the benefits of a valuable asset. The brand name can be protected
through trademarks, manufacturing processes through patents, and packaging through copyrights.
Consumers’ brand loyalty provides predictability and security of demand and creates barriers of entry,
because lasting impressions in the minds of individuals cannot be easily duplicated by competitors.

Can anything be branded?

Ultimately a brand is something that resides in the minds of consumers: it reflects their perceptions.
Marketers must give consumers a label for the product (how you can identify it) and provide meaning for
the brand (what it can do for you, and why it is special and different). The key to branding is that consumers
perceive differences (related to attributes, the product/service itself, or intangible assets) among brands
in a product category. Marketers can benefit from branding whenever consumers have to make a choice.

Business-to-business branding creates a positive image for the company as a whole. Goodwill with business
customers is thought to lead to greater selling opportunities and more profitable relationships. A strong
brand can provide valuable reassurance and clarity to business customers who may be putting their
company’s fate/their own careers on the line. A strong B2B brand can thus provide a strong competitive
advantage.
High-tech firms often lack any kind of brand strategy and sometimes see branding as simply naming their
products. However, marketing skills, besides product innovation, play an increasingly important role in the
adoption and success of high-tech products.

A challenge in marketing services is that they are intangible and more likely to vary in quality than products,
depending on the particular people providing them. Brands can help identify and provide meaning to the
different services provided by a firm.

Branding can effectively signal to consumers that the firm has designed a particular service offering that is
special and deserving of its name. Professional service branding is a combination of B2B branding and
traditional service branding. Corporate credibility is key and variability is more of an issue because it is
harder to standardize the services of a consulting firm than those of a typical consumer services firm. In
professional services individual employees have a lot more of their own equity in the firm and are often
brands in their own right. They need to ensure that their words and actions help to build the corporate
brand, and not their own because when they leave the company, they will then take their equity with them.
Referrals, testimonials, emotions and switching costs can have a lot of influence when branding services.

To retailers and distributors, brands can generate consumer interest, patronage, and loyalty in a store.
Retailers can create their own brand image by attaching unique associations to the quality of their service,
their assortment, and their pricing policy. The more appealing the brands they offer, the higher the possible
price margins, sales volumes, and profits. Store brands/private label brands = retailers/distributors
creating their own brands by using their store name, to increase customer loyalty and generate higher
margins and profits.

Online marketers must also create unique aspects of the brand on a dimension that is important to
consumers. At the same time, the brand needs to perform satisfactorily in other areas such as customer
service. By offering unique features and services to consumers, the best online brands are able to rely on
word-of-mouth and publicity while avoiding extensive advertising. Online brands also need to focus on
offline activities to draw consumers to their websites.

People and organizations often have well-defined images that are easily understood and (dis)liked by
others. They compete in some sense for public approval and acceptance, benefiting from conveying a strong
and desirable image. By building up a name and reputation in a business context, you are creating your
own brand as a person.

Sports teams engage in marketing to meet ticket sales regardless of their performance and to get sponsors.
In the arts and entertainment industries marketing is used to generate positive word-of-mouth and to make
consumers expect a certain experience. Places like cities or countries are marketed with the aim to create
awareness and a favorable image of the location that will encourage temporary visits from tourists or
permanent moves from individuals and businesses. Many nonprofit organizations brand ideas and
causes to inform or persuade consumers about the issues surrounding such ideas/causes.

What are the strongest brands?

Virtually anything can be and has been branded. However, any brand, no matter how strong, is vulnerable
and susceptible to poor management. Factors determining enduring leadership are:

• Vision of the mass market: companies with a keen eye for mass market tastes are more likely to
build a broad and sustainable customer base;
• Managerial persistence: the ‘breakthrough’ technology that can drive market leadership often
requires the commitment of company resources of long periods of time;
• Financial commitment: costs are high because of the demands for R&D and marketing;
• Relentless innovation: consumer tastes change and competitors develop, so you must keep
innovating to stay ahead;
• Asset leverage: companies can become leaders in some categories if they hold a leadership
position in a related category.
Branding challenges and opportunities

Some recent developments that have complicated marketing practices and pose challenges:

Consumers and businesses have become more experienced with marketing, more knowledgeable about
how it works, and more demanding. In today’s marketing environment, there is a vast number of
information sources available to consumers.

Economic downturns: consumers buy lower-priced brands instead of higher-priced products.

Many marketers have added a host of new products under their umbrella brand. By the proliferation of
new brands and products, there are few single product brands around, complicating the decisions that
marketers have to make.

Traditional advertising media has been fragmented and nontraditional media have emerged. Marketers are
now spending more on the latter.

The marketplace has become more competitive: on the demand side, consumption for many products has
hit the maturity stage, leading to a situation wherein marketers can only achieve sales growth by taking
away competitors’ market share. On the supply side, new competitors have emerged due to globalization,
low-priced competitors (store brands and imitators of product leaders), brand extensions, and
deregulation.

The cost of new product introduction or supporting an existing product has increased rapidly.

Marketers are responsible for meeting short-term profit targets because of market pressures and senior
management imperatives. On the other hand, stock analysts value the long-term financial health of a firm.
Therefore marketing managers find themselves in the dilemma of having to make decisions with short-
term benefits but long-term costs. Also, they cannot really make a difference because the average job
turnover is rapid.

The brand equity concept

Brand equity = the marketing effects uniquely attributable to a brand. It explains why different outcomes
result from the marketing of a branded product or service than if it were not branded. Basic principles of
branding and brand equity:

Differences in outcomes arise from the ‘added value’ endowed to a product as a result of past marketing
activity for the brand. This value can be created for a brand in many different ways. Brand equity provides
a common denominator for interpreting marketing strategies and assessing the value of a brand. There are
many different ways in which this value can be manifested or exploited to benefit the firm. Fundamentally,
the brand equity concept reinforces how important the brand is in marketing strategies.

Strategic brand management process

Strategic brand management = the design and implementation of marketing programs and activities to
build, measure, and manage brand equity. The process has four steps:

1. Identifying and developing brand plans;

2. Designing and implementing brand marketing programs;
3. Measuring and interpreting brand performance;
4. Growing and sustaining brand equity.

Identifying and developing brand plans

What is the brand to represent and how should it be positioned? Use three models:
Brand positioning model = describes how to guide integrated marketing to maximize competitive
advantages;

Brand resonance model = describes how to create intense, active loyalty relationships with customers;

Brand value chain = a means to trace the value creation process for brands, to better understand the
financial impact of brand marketing expenditures and investments.

Designing and implementing brand marketing programs

Building brand equity requires properly positioning the brand in the minds of customers and achieving as
much brand resonance as possible. This knowledge-building process depends on:

The initial choices of the brand elements making up the brand and how they are mixed and
matched: what would consumers think about the product/service if they knew only the brand
name/logo/other element?;

The marketing activities and supporting marketing programs and the way the brand is integrated
into them;

Other associations indirectly transferred or leveraged by the brand as a result of linking it to some
other entity: because the brand becomes identified with another entity, consumers may infer that the
brand shares associations with that entity, thus producing indirect associations for the brand.

Measuring and interpreting brand performance

Brand equity measurement system = a set of research procedures designed to provide timely, accurate,
and actionable information for marketers so that they can make the best possible tactical decisions in the
short run and the best strategic decisions in the long run. Key steps:

Conducting a brand audit = a comprehensive examination of a brand to assess its health, uncover its
sources of equity, and suggest ways to improve and leverage its equity;

Designing brand tracking studies = information collection from consumers on a routine basis over time;

Establishing a brand equity management system = a set of organizational processes designed to improve
the understanding and use of the brand equity concept within a firm. Steps: creating brand equity charters,
assembling brand equity reports, and defining brand equity responsibilities.

Growing and sustaining brand equity

Brand equity management activities take a broader/more diverse perspective of the brand’s equity:

Defining brand architecture = general guidelines about the branding strategy and which brand elements
to apply. Key concepts are brand portfolio = the set of different brands that a particular firm offers for sale
to buyers in a particular category, and brand hierarchy = displays the number and nature of common and
distinctive brand components across the firm’s set of brands.

Managing equity over time: a long-term perspective recognizes that any changes in the marketing
program may affect the success of future programs. It also produces proactive strategies designed to
maintain and enhance customer-based brand equity over time and reactive strategies to revitalize a brand
that encounters problems.

Managing brand equity over geographic boundaries, cultures, and market segments: in expanding a
brand overseas, managers need to build equity by relying on specific knowledge about the experience and
behaviors of those segments.
Back to top

Chapter B. Customer-based brand equity and brand

positioning
Three interconnected models are helpful when planning the development of brands:

• Brand positioning model = describes how to establish competitive advantages in the minds of
customers in the marketplace;
• Brand resonance model = describes how to take these competitive advantages and create
intense, active loyalty relationships with customers for brands;
• Brand value chain model = describes how to trace the value creation process to better
understand the financial impact of marketing expenditures and investments to create loyal
customers and strong brands.

Positioning = defining the ideal brand knowledge structures and establishing points-of-parity (POPs: no
reason why consumers should not buy the brand) and points-of-difference (PODs: reason why consumers
should buy the brand) in consumers’ minds to establish the right brand identity and brand image.

Customer-based brand equity

The CBBE concept = approaches brand equity from the perspective of the consumer
(individual/organization and existing/prospective). Marketers have to understand the needs and wants of
consumers and organizations: what do different brands mean to them, and how does their brand
knowledge affect their response to marketing activities? According to the CBBE concept, the power of a
brand lies in what resides in the minds and hearts of customers.

Customer-based brand equity = the differential effect that brand knowledge has on consumer response
to the marketing of the brand. It is positive when consumers react more favorably to a product and the way
it is marketed than when it is not branded.

Brand equity arises from differences in consumer response (differential effect). These differences are a
result of consumers’ brand knowledge. Consumers’ responses to marketing make up brand equity and
are reflected in perceptions, preferences, and behavior related to all aspects of brand marketing.
Consumers’ perceptions of product performance are highly dependent on their impressions of the brand
that goes along with it. Thus, consumer knowledge drives the differences that manifest themselves in terms
of brand equity.

Money spent on marketing should be considered investments instead of expenses. The quality of these
investments is more important than the quantity. The brand knowledge that marketers create over time
dictates (in)appropriate future directions for the brand. Consumers will decide where they think the brand
should go.

Making a brand strong: brand knowledge

According to the CBBE concept, brand knowledge is the key to creating brand equity because it creates the
differential effect that drives it. The associative network memory model views memory as a network of
nodes and connecting links, in which nodes represent stored information or concepts, and links represent
the strength of association between the nodes. Any type of information can be stored in the memory
network.

Brand knowledge has two components: brand awareness = related to the strength of the brand
node/trace in memory, which can be measured as the consumer’s ability to identify the brand under
different conditions. Brand image = consumers’ perceptions about a brand, as reflected by the brand
associations (other informational nodes linked to the brand node in memory, containing the meaning of
the brand for consumers, e.g. ‘safety’ or ‘quality’) held in consumer memory.

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 brand associations in memory. In low-
involvement decisions brand awareness alone may be enough to create favorable consumer response. In
most other cases, the strength, favorability, and uniqueness of brand associations play a critical role in
determining the differential response that makes up brand equity. If consumers perceive the brand as only
representative of the product/service category, they’ll respond as if the offering were unbranded.
Therefore marketers must convince them that there are meaningful differences between brands.

Brand awareness consists of:

• Brand recognition = consumers’ ability to confirm prior exposure to the brand when given the
brand as a cue à important when decision is made at point of purchase;
• Brand recall = consumers’ ability to retrieve the brand from memory when given the product
category, the needs fulfilled by the category, or a purchase/usage situation as a cue à important if
decisions are made in setting away from the point of purchase.

Advantages of creating a high level of brand awareness are:

• Consideration advantage: brand awareness influences the formation and strength of the brand
associations that make up the brand image. To create that image, a brand node in memory has to
be established; the brand has to be registered in consumers’ minds. If the right brand elements are
chosen, the task becomes easier.
• Consideration advantage: raising brand awareness increases the likelihood that the brand will
be in the consideration set of the consumer and decreases the chance that other brands will be
considered/recalled.
• Choice advantage: brand awareness can affect choices among brands in the consideration set,
even if there are essentially no other associations to those brands.

The elaboration-likelihood model = consumers may make choices based on brand awareness
considerations when they have low involvement. This results when consumers lack either purchase
motivation (they don’t care about the product/service, e.g. different gasoline brands), or purchase ability
(they don’t know anything else about the brands in a category, e.g. high-tech products).

Creating brand awareness means increasing the familiarity of the brand through repeated exposure (more
effective for recognition than for recall). Anything that causes consumers to experience one or more brand
elements like its name and logo, can increase the brand awareness. Repetition increases recognizability,
but improving brand recall also requires linkages in memory to the right product categories or other cues.
Strong links between the brand and cues may become especially important over time if the product
meaning of the brand changes through extensions, mergers, or acquisitions.

Once a sufficient level of brand awareness is created, marketers can put more emphasis on crafting a brand
image. Creating a positive brand image takes marketing programs that link strong, favorable, and unique
associations to the brand in memory. Such associations may be either brand attributes = descriptive
features that characterize a product/service, or brand benefits = personal value and meaning that
consumers attach to the attributes.

CCBE does not distinguish between the source of brand associations: all that matters is their strength,
favorability, and uniqueness. Consumers can form associations with a brand not only through the brand’s
marketing, but also through other sources like direct experiences, and word-of-mouth. Associations need
to be unique, because then they help consumers choose between brands.

Some factors that in general affect the strength, favorability, and uniqueness of brand associations:
Factors that strengthen association to information are the personal relevance and the consistence with
which it is presented over time. Direct experiences create the strongest brand attributes. Word-of-mouth
is especially important for service organizations. Company-influenced sources of information (e.g.
advertising) create the weakest associations.

Favorable brand associations are created by convincing consumers that the brand possesses relevant
attributes and benefits for them. Some associations may be more important to consumers than others, and
they may be situation- or context-dependent and vary according to what consumers want to achieve in
their decision.

Marketers can make the unique differences of their brand explicit through direct comparisons with
competitors or by implicitly highlighting them. These differences may be performance- or non-
performance related.

Shared associations with competitors can be used to establish category membership and to define the
scope of the brand. The strength of the brand associations to the product category is an important
determinant of brand awareness.

Identifying and establishing brand positioning

Brand positioning = the act of designing the company’s offer and image so that it occupies a distinct and
valued place in the target customer’s minds. It means finding the proper ‘location’ in the minds of a group
of consumers, so that they think about the product in the desired way to maximize potential benefit to the
firm. Marketers need to know who the target consumer is, who the main competitors are, how the brand is
similar to these competitors, and how the brand is different from them.

Market = the set of all actual and potential buyers who have sufficient interest in, income for, and access
to a product. Market segmentation divides the market into distinct groups of homogeneous consumers
with similar interests and similar behavior, and who therefore require similar marketing mixes.

Segmentation bases can be descriptive/customer-oriented (what kind of person is the customer?) or

behavioral/product-oriented (how does the customer think of/use the product?). The latter is most often
most valuable in understanding branding issues because they have clearer strategic implications.

Funnel model = traces consumer behavior through several stages: aware à ever tried à recent trial à
occasional use à regular use à most often use. Marketers want to understand the percentage of the target
market that is present at each stage and the factors influencing the transition from one stage to the next.

Criteria to guide segmentation and target market decisions:

• Can we easily identify the segment?

• Is there adequate sales potential (size) in the segment?
• Are specialized distribution outlets and communication media available to access the segment?
• How favorably will the segment respond to a tailored marketing program?

When a company decides to target a certain segment, it implicitly defines the nature of competition because
the companies targeting the same segment will become direct competitors. However, because competition
occurs often at the benefit level instead of the attribute level, two completely different products can still be
(indirect) competitors, because they for example both satisfy a hedonic need.

Brands can identify more than one frame of reference, e.g. Canon cameras competing with Nikon cameras,
but also with those on mobile phones. Ideally, Canon should develop a robust positioning that would be
effective across both frames. If that is not effective, Canon has to prioritize and choose the most relevant
set of competitors to serve as the frame of reference. Lowest common denominator positioning =
ineffective positioning because then you try to be all things to all people.
Once the frame of reference is defined, the basis of the positioning itself can be defined. Points-of-
difference (PODs) = attributes/benefits that consumers strongly associate with a brand, positively
evaluate, and believe that they could not find to the same extent with a competing brand. PODs may rely on
functional attributes (the perceived uniqueness of brand associations), performance attributes/benefits,
or come from imagery associations (e.g. the luxury status of Louis Vuitton). Consumer benefits often have
important underlying proof points/reasons to believe (RBTs) like key attributes, ingredients, or
endorsements.

Points-of-parity associations (POPs) are not necessarily unique to the brand but may be shared with
other brands. Types:

• Category points-of-parity = necessary conditions for brand choice; are most likely to exist at the
expected product level (e.g. a bank is only considered a bank if it offers the services that are
expected to be offered by a bank).
• Competitive points-of-parity = associations designed to negate competitors’ points-of-
difference. In order to have a strong competitive position, a brand must excel in some areas and be
sufficient in others.
• Correlational points-of-parity = potentially negative associations that arise from the existence
of other, more positive associations for the brand. If your brand is good at one thing, it probably
isn’t at another. Also some attributes have both positive and negative aspects.

POPs are important because they can undermine PODs: unless certain POPs can be achieved to overcome
potential weaknesses, PODs may not even matter. Consumers must feel that a brand does sufficiently well
on a particular attribute in order not to consider it as a problem. If so, they base their evaluations/decisions
on the (other) factors that the brand is good at.

Positioning guidelines

Two key issues arriving at the optimal competitive brand positioning are defining and communicating the
competitive frame of reference and choosing and establishing points-of-parity and points-of-difference.

When defining a competitive frame of reference for a brand positioning you start by determining category
membership. Find out with which products the brand competes. The category membership of a product
tells consumers about the goals they might achieve by using that product. The most obvious scenario in
which it is important to inform customers about the brand’s category membership is when introducing
new products. Reinforcement of category membership may be important when consumers are aware of
the product, but are not certain whether the product is of the same quality (in the same ‘class’) as other
brands in the category.

Preferably consumers have to be informed of a brand’s membership before stating its PODs. They need to
know what a product is and what it’s use is before they can decide whether it dominates the brands against
which it competes.

There are three main ways to convey a brand’s category membership:

• Communicating category benefits: to reassure consumers that a brand will deliver on the
fundamental reason for using a category, marketers frequently use benefits to announce category
membership. These are presented in a way that notes that the brand possesses them as a mean to
establish category POPs.
• Exemplars: well-known brands in a category can be used as exemplars to specify a brand’s
category membership, e.g. associating a new designer with a brand like Calvin Klein.
• Product descriptor: giving away the category origin in the name, e.g. US Airways.

After the competitive frame of reference has been communicated and the POPs are made clear, PODs can
be developed. In order for a brand to be perceived as different, the brand association must be seen as
desirable from the consumer’s point of view, as deliverable on a company’s inherent capabilities, and as
differentiating relative to the competitors. A brand association has sufficient strength if consumers see the
attribute as highly important, feel confident that the firm has the capabilities to deliver it, and are convinced
that no other brand can offer it to the same extent.

Desirability criteria: target consumers must find the POD personally relevant and important. The
differences must matter to them.

Deliverability criteria: depends on a company’s actual ability to make the product (feasibility) and their
effectiveness in convincing customers of this ability (communicability).

Differentiation criteria: target customers must find the POD distinctive and superior.

The key to branding success is to establish both POPs and PODs. One of the challenges in positioning is the
inverse relationship that may exist in the minds of consumers. Several approaches to address the problem
of negatively correlated POPs and PODs in increasing order of effectiveness and difficulty are:

• Separate the attributes: launch two different marketing campaigns, each devoted to a different
brand attribute/benefit. This way the negative correlation may be less apparent because the
attributes are marketed separately. However, developing two strong campaigns is costly and if the
marketer does not address the negative correlation head-on, consumers may not develop as
positive an association as desired.
• Leverage equity of another entity: brands can be linked to any kind of entity (a person, other
brand, event, etc.) that possesses the right kind of equity.
• Redefine the relationship: convince consumers that the relationship is, in fact, positive by
providing them with a different perspective.

Sometimes a company will be able to straddle two frames of reference with one set of PODs and POPs. The
PODs in one category then become the POPs in another and vice versa. This is attractive because it can
reconcile potentially conflicting consumer goals and create a ‘best-of-both-worlds solution’. However, if the
PODs and POPs are not credible, consumers may not view the brand as a legitimate player in either
category.

As a general rule, the positioning of an established brand should be fundamentally changed very
infrequently and only when circumstances significantly reduce the effectiveness of existing POPs and PODs.

Laddering = the need to deepen the meaning of the brand to permit further expansion. Once the target
market attains a basic understanding of how the brand relates to alternatives in the same category,
laddering may occur.

According to Maslow, higher-level needs become relevant once lower-level needs have been satisfied:

Means-end chains = a consumer chooses a product that delivers an attribute that provides benefits or has
certain consequences that satisfy values.

Laddering thus progresses from attributes to benefits to more abstract values or motivations. As a product
becomes associated with more and more products and moves up the product hierarchy, its meaning will
become more abstract.

Another opportunity for changing the positioning is reacting to competitive actions. Often competitive
advantages exist for only a short time, until competitors imitate them. When a competitor challenges an
existing POD or attempts to overcome a POP, there are three options: do nothing, go on the defensive (e.g.
by adding some reassurance in the product to strengthen POPs and PODs), or go on the offensive
(reposition the brand to address the threat, e.g. by launching a product extension or ad campaign that
fundamentally changes the meaning of the brand). A good positioning….

• Has a ‘foot in the present’ and a ‘foot in the future’. It needs to give room to the brand to grow and
improve.
 • Is careful to identify all relevant POPs: beware to not overlook important POPs and uncover them
e.g. by role playing and by doing consumer research.
• Should reflect a consumer point of view in terms of the benefits that consumers derive from the
brand. Make clear why the product is attractive.
• Has both rational and emotional components.

Defining a brand mantra

As brands evolve and expand across categories, marketers will want to craft a brand mantra that reflects
the essential heart and soul of the brand. A brand mantra/brand essence/core brand promise = a short,
3-5 word phrase that captures the essence of the brand positioning. Brand mantras can provide guidance
about that product to introduce under the brand, what ad campaigns to run, and where and how the brand
should be sold. They create a mental filter to screen out brand-inappropriate marketing activities/actions
of any type that may have a negative bearing on customers’ impressions of a brand. The brand mantra
signals its meaning and importance to the firm, as well as the crucial role of employees and marketing
partners in its management. It provides memorable shorthand as to what are the crucial considerations of
the brand that should be kept most salient and top-of-mind too.

Brand mantras must economically communicate what the brand is and what it is not. A good example is
Nike: authentic (emotional modifier), athletic (descriptive modifier), performance (brand function).
The brand function describes the nature of the product or the type of benefits it provides. The descriptive
modifier further clarifies the nature. The emotional modifier provides how the brand exactly provides
benefits and in what ways.

Brand mantras derive their power and usefulness from their collective meaning. No other brand should
singularly excel on all dimensions. They are typically designed to capture the brand’s PODs. POPs may also
be important. For brands facing rapid growth, a brand functions term can provide critical guidance as to
(in)appropriate categories into which to extend. For more stable brands, the mantra may focus more on
the PODs.

Brand mantras may benefit from the learning gained from the brand audit and other activities used for
deciding on the brand’s positioning. However, the mantra requires more internal examination. The
different means by which each and every employee currently affects brand equity, and how he or she can
contribute in a positive way to a brand’s destiny have to be determined. Considerations that should come
into play in the final mantra:

• Communicate: the mantra should define the category and clarify what is unique about the brand;
• Simplify: it should be memorable, short, crisp, and vivid;
• Inspire: it should stake out ground that is personally meaningful and relevant to as many
employees as possible.

There will always be a level of meaning beneath the brand mantra itself that will need to be articulated.

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Chapter C. Brand resonance and the brand value chain

Brand resonance model = describes how to create intense, active loyalty relationships with customers. It
considers how brand positioning affects what consumers think, feel, and do and the degree to which they
connect (resonate) with a brand.

Brand value chain = a means by which marketers can trace the value creation process for their brands to
better understand the financial impact of their marketing expenditures and investments. Partly based on
the customer-based brand equity (CBBE) concept, it offers a holistic, integrated approach to understanding
how brands create value.

Building a strong brand: the four steps of brand building

The brand resonance model looks at building a brand in steps with a branding ladder, each of which is
contingent on successfully achieving the objectives of the previous one. They are related to questions that
consumers ask about brands:

1. Ensure identification of the brand with customers and an association of the brand in customers’
minds with a specific product class, product benefit, or customer need à Who are you? Brand
identity/salience: deep, broad brand awareness;
2. Firmly establish the totality of brand meaning in the minds of customers by strategically linking a
host of brand associations à What are you? Brand meaning/performance/imagery: PODs &
POPs;
3. Elicit the proper customer responses to the brand à What do I think/feel about you? Brand
responses/judgments/feelings: positive, accessible reactions;
4. Convert brand responses to create brand resonance and an intense, active relationship between
customers and the brand. What kind of association and how much of a connection would I like to
have with you? Brand relationships/resonance: intense, active loyalty.
We cannot establish meaning unless we have created identity, responses cannot occur unless we have
developed the right meaning, and we cannot forge a relationship unless we have elicited the proper
responses.

Brand building blocks = the above steps in a pyramid with resonance on top. Brands will only have
significant brand equity if they reach the top of the pyramid.

Step 1. Brand salience (brand building block 1)

Brand salience = measures various aspects of awareness of the brand and how easily and often the brand
is evoked under various situations or circumstances.

Building brand awareness helps customers understand the product category in which the brand competes
and what products are sold under the brand name. it also ensures that they know which of their needs the
brand is designed to satisfy.

It gives the product an identity by linking brand elements to a product category and associated
purchase/consumption/usage situation. The depth of brand awareness measures how likely it is for a
brand element to come to mind and the ease with which it does so. The breadth measures the range of
situations in which the brand element comes to mind and depends to a large extent on the organization of
brand and product knowledge in memory.

Product category structure = how product categories are organized in memory. In consumers’ minds, a
product hierarchy exists, with product class information at the following levels, 1 being the highest:

1. Product class information;

2. Product category information;
3. Product type information;
4. Brand information.

Example: a consumer first chooses between water or a flavored beverage. Then he decides whether or not
to have an alcoholic drink, and then he chooses a brand.

A brand must not only be top-of-mind and have sufficient mind share, it must also do so at the right times
and places. For many brands, the key question is not whether customers recall it, but where, when, and
how easily and often they think of it. Brands that are forgotten in usage situations should increase brand
salience and the breadth of brand awareness. It may be harder to change existing brand attitudes than to
remind people of their existing attitudes toward a brand.

A highly salient brand is one that has both depth and breadth of brand awareness. Salience is the first step
and for many customers it is not sufficient because other considerations such as the image of the brand
may play a role. Creating brand meaning includes establishing a brand image, made up of brand
associations related to performance and imagery.

Step 2.1 Brand performance (brand building block 2)

The product itself is the primary influence on what consumers experience with a brand. A product that fully
satisfies consumer needs is a prerequisite for successful marketing. Brand performance = how well the
product/service meets customers’ more functional needs. Important types of attributes/benefits that
underlie brand performance are:

• Primary ingredients and supplementary features: customers have beliefs about the levels at
which the primary ingredients of the product operate. Some are essntial and necessary for a
product to work, others are supplementary features that allow for customization.
 • Product reliability, durability, and serviceability: realiability = the consistency of
performance over time and from purchase to purchase, durability = the expected economic life of
the product, and serviceability = the ease of reparing the product if needed.
• Service effectiveness, efficiency, and empathy: service effectiveness = how well the brand
satisfies customers’ service requirements, service efficiency = the speed and responsiveness of
service, and service empathy = the extent to which service providers are seen as trusting, caring,
and having the customer’s interests in mind.
• Style and design: consumers look beyond the functional aspects to more aesthetic considerations
such as size and color. Performance may also depend on how a product looks, feels, smells, etc.
• Price: a particularly important performance association because consumers may organize their
knowledge in terms of the price tiers of different brands within a category.

Step 2.2 Brand imagery (brand building block 3)

Brand imagery depends on the extrinsic properties of the product. It is the way people think about the
brand abstractly, rather than what they think the brand actually does. Imagery = more intangible aspects
of the brand. Four main kinds of intangibles are user profiles, purchase and usage situations, personality
and values, and history, heritage, and experiences.

User imagery can be customers’ mental image of actual users of the brand or idealized users. Consumers
may base this image on factors like gender, age and income, but also on psychographic factors like careers,
social issues, and attitudes.

Purchase and usage imagery tells consumers under what conditions or situations they can/should buy
and use the brand. Associations can relate to a type of channel, to specific stores, and to ease of purchase
and associated rewards.

Brand personality and values can be divided into five dimensions: sincerity, excitement, competence,
sophistication, and ruggedness (outdoorsy and tough). Marketing and communications may be influential
in affecting brand personality because of the inferences consumers make about the underlying user/usage
situation depicted in an advertisement. The actors in an ad, the tone or style, and the emotions evoked by
the ad can affect brand personality. When user and usage imagery are important to consumer decisions,
brand personality and imagery and more likely to be related. Consumers often choose and use brands that
have a brand personality consistent with their own self-concept or the desired image they have of
themselves. Consumers who are high self-monitors and sensitive to how others see them are more likely
to choose brands whose personalities fit the consumption situation.

Brand history, heritage, and experiences may recall personal experiences and episodes or past
behaviors and experiences of friends, family, or others. They can be highly personal and individual, or
shared by many people. These types of associations help create strong PODs. They draw upon more specific,
concrete examples that transcend the generalizations that make up the usage imagery.

The brand associations making up the brand image and meaning can be characterized according to three
dimensions: strength, favorability, and uniqueness. Successful results on these dimensions produce the
most positive brand responses, leading to brand loyalty. It is essential to create strong, favorable, and
unique associations in order to build CBBE. Brand responses can be either brand judgments or brand
feelings.

Step 3.1 Brand judgments (brand building block 4)

Brand judgments = customers’ personal opinions about and evaluations of the brand, which they form by
putting together all the different brand performance and imagery associations. Four types are important:

Judgments about brand quality: brand attitudes are consumers’ overall evaluations of a brand and form
the basis for brand choice. The most important ones relate to the perceived quality and to customer value
and satisfaction.
Judgments about brand credibility = the extent to which customers see the brand as credible in terms of
three dimensions:

• Brand expertise: is the brand seen as competent, innovative, and a market leader?
• Brand trustworthiness: is the brand dependable and keeping customer interests in mind?
• Brand likability: is the brand fun, interesting, and worth spending time with?

Judgments about brand consideration: depend in part on how personally relevant customers find the
brand and are a crucial filter in terms of building brand equity. Consumers must deem a brand relevant and
give it serious consideration, otherwise they will keep it at a distance.

Judgments about brand superiority = the extent to which customers view the brand as unique and better
than other brands. It is critical to building intense and active relationships with customers and depends on
the number/nature of unique brand associations.

Step 3.2 Brand feelings (brand building block 5)

Brand feelings = customers’ emotional responses and reactions to the brand. They also relate to the social
currency evoked by the brand. Trustmark = a name/symbol that emotionally binds a company with the
desires and aspirations of its customers, ultimately a lovemark. Transformational advertising =
advertising designed to change consumers’ perceptions of the actual usage experience with the product.
They need to love the offering, otherwise they will not be interested. Important types of brand-building
feelings are:

• Warmth: consumers may feel sentimental, warmhearted, or affectionate about the brand;
• Fun: consumers may feel amused, lighthearted, joyous, playful, cheerful, etc.;
• Excitement: the brand makes consumers feel energized, being alive, cool, etc.;
• Security: consumers feel safe, comfortable, and self-assured;
• Social approval: the brand gives consumers a belief that others look favorably on their
appearance, behavior, etc.;
• Self-respect: the brand makes consumers feel better about themselves, they feel pride,
accomplishment or fulfillment.

Warmth, fun, and excitement are experiential and immediate feelings , increasing in level of intensity. The
latter three are private and enduring, increasing in level of gravity.

What matters ultimately about consumer responses, is how positive and accessible they are. Brand
judgments and feelings can favorably affect consumer behavior only if they internalize or think of positive
responses in their encounters with the brand.

Step 4. Brand resonance (brand building block 6)

Brand resonance = the nature of the relationship that the customer has with the brand and the extent to
which customers feel that they are ‘in sync’ with the brand. It is characterized in terms of intensity (= the
depth of the bond customers have with the brand) and activity(= repeat purchases and the extent to which
they seek out brand information, events, and other loyal customers). Categories of brand resonance are:

Behavioral loyalty = repeat purchases and the amount or share of category volume attributed to the brand
(the share of category requirements). How often do customers purchase a brand and how much do they
purchase? The brand must generate sufficient purchase frequencies and volumes in order to generate
bottom-line profit results.

Attitudinal attachment: customers should go beyond having a positive attitude to viewing the brand as
something special in a broad context. They have to love the brand. Creating greater loyalty requires deeper
attitudinal attachment, through marketing programs and products that fully satisfy consumer needs.
Sense of community: customers may feel affiliated with other people associated with the brand. A
stronger sense of community among loyal users can engender favorable brand attitudes and intentions.

Active engagement = when customers are willing to invest time, energy, money, and other resources in
the brand beyond those expended during purchase/consumption. Strong attitudinal attachment, social
identity, or both are necessary for active engagement with the brand to occur.

Brand-building implications

The brand resonance model with its 4 steps mentioned above, also reinforces a number of important brand
tenets:

Customers own the brands: the strongest brands will be those to which consumers become so attached
that they become evangelists and attempt to share their beliefs and spread the word about the brand. The
power of a brand and its ultimate value to the firm reside within customers. The success of a company’s
marketing efforts ultimately depends on how consumers respond and the actions they take.

Don’t take shortcuts with brands: a great brand is the product of carefully accomplishing a series of
logically linked steps with consumers. The length of time to build a strong brand will be directly
proportional to the amount of time it takes to create sufficient awareness and understanding so that firmly
held and felt beliefs and attitudes about the brand are formed that can serve as the foundation for brand
equity.

Brands should have duality: they must appeal to both the head and the heart. Strong brands blend
product performance and imagery to create a rich, varied, but complementary set of consumer responses
to the brand.

Brands should have richness: the various associations making up the brand image may be reinforcing,
helping strengthen or increase the favorability of other brand associations, or they may be unique, helping
add distinctiveness or offset some potential deficiencies. Strong brands have both breadth (in terms of
duality) and depth (in terms of richness). Brands should not necessarily be expected to score highly on all
dimensions and categories making up each core brand value.

Brand resonance provides important focus: marketers building brands should use resonance as a goal
and a means to interpret their brand-related marketing activities. To what extent is marketing activity
affecting the key dimensions consumer loyalty, attachment, community and engagement? And is it creating
brand performance and imagery associations and consumer judgments and feelings that will support these
dimensions?

Consumers cannot experience an intensive, active loyalty relationship with all the brands they consume.
Some brands will be more important (have more resonance potential) to them than others.

The brand value chain

To better understand the ROI of marketing investments, the brand value chain is necessary. Brand value
chain = a structured approach to assessing the sources and outcomes of brand equity and the manner by
which marketing activities create brand value. It recognizes that many different people within an
organization can affect brand equity and need to be aware of relevant branding effects. It also assumes that
the value of a brand ultimately resides within its customers. The brand value creation process stages:

Stage 1. Marketing program investment

When the firm invests in a marketing program targeting actual or potential customers. The ability of this
investment to transfer or multiply farther down the chain depends on qualitative aspects of the marketing
program and the program quality multiplier = the ability of the marketing program to affect the customer
mind-set. Means to judge the quality (DRIVE): The distinctiveness, relevance, integrated, value
and excellence of the program.
Stage 2. Customer mind-set

The associated marketing activity affects the customer mind-set as reflected by the brand resonance model.
The 5 As highlight important measures of the mind-set: brand awareness, associations, attitudes,
attachment, and brand activity. Awareness supports associations, which drive attitudes that lead to
attachment and activity. Brand value is created at this stage when customers have deep, broad brand
awareness, appropriately strong, favorable, and unique POPs and PODs, positive brand judgments and
feelings, intense brand attachment and loyalty, and a high degree of brand activity.

The ability of the customer mind-set to create value at the next stage depends on external factors, called
the marketplace conditions multiplier = the extent to which value created in the minds of customers
affects market performance depends on factors beyond the individual customers. Factors: competitive
superiority, channel and other intermediary support (how much effort is being put forth by various
marketing partners), and customer size and profile. The value created in the minds of customers will
translate to favorable market performance when competitors fail to provide a significant threat, when
channel members and other intermediaries provide strong supports, and when a sizable number of
profitable customers are attracted to the brand.

Stage 3. Market performance (six key outcomes of customer response)

This mind-set produces the brand’s performance in the marketplace (how much and when customers
purchase, what they pay for it, etc.). Price premiums, price elasticities, and market share determine the
direct revenue stream attributable to the brand over time. Brand value is created with higher market
shares, greater price premiums, and more elastic responses to price decreases and inelastic responses to
price increases. Brand expansions, the success of the brand in supporting line and category extensions
and new-product launches, capture the brand’s ability to add enhancements to the revenue stream.
Reduced marketing expenditures (cost structure) thanks to the prevailing customer mind-set, means that
the same level of effectiveness can be achieved at a lower cost because ads are more memorable, sales calls
more productive, etc.

When combining the five outcomes, they lead to brand profitability = the brand value created in terms of
stock market valuation. This depends on external factors according to the investor sentiment
multiplier = a host of factors in arriving at brand valuations and investment decisions: market dynamics,
growth potential, risk profile, and brand contribution. The value the brand creates in the marketplace is
fully reflected in shareholder value when the firm is operating in a healthy industry and when the brand
contributes a significant portion of the firm’s revenues and has bright prospects.

Stage 4. Shareholder value

The investment community considers the market performance to arrive at an assessment of shareholder
value in general and a value of the brand in particular. Important indicators of shareholder value are stock
price, the price/earnings multiple, and overall market capitalization for the firm.

Implications

According to the brand value chain, marketers create value first by making shrewd investments in their
marketing program and then by maximizing the program, customer, and market multipliers that translate
that investment into bottom-line financial results. Implications of the value chain:

Value creation begins with the investment of a well-funded, well-designed, and well-implemented
marketing program.

Value creation requires more than the initial marketing investment. It also means ensuring that value
transfers from stage to stage.

The brand value chain provides a detailed road map for tracking value creation that can make marketing
research and intelligence efforts easier. The marketing program investment stage is straightforward and
can come from the marketing plan and budget. Both customer-mind-set and the program quality multiplier
can be assessed with customer research. Market performance and the marketplace conditions multiplier
appear in market scans and internal accounting records. Shareholder value and investor sentiment
multiplier can be estimated through investor analysis and interviews.

Modifications of the brand value chain can expand its relevance and applicability:

• There are a number of feedback loops, e.g. stock prices having an important effect on employee
motivation;
• The value creation may not occur sequentially, e.g. stock analysts may react to an ad campaign for
the brand and factor those reactions directly into their assessments;
• Some marketing activities may have only very diffuse effects that manifest over the long term, e.g.
social responsibility marketing might affect customer sentiment slowly over time;
• Both the mean and the variance of some brand value chain measures could matter, e.g. a niche
brand may receive very high marks but only across a very narrow range of customers.

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Chapter E. Designing and implementing brand

marketing programs
How do marketing activities in general build brand equity, and how can marketers integrate these activities
to enhance brand awareness, improve brand image, elicit positive brand responses, and increase brand
resonance?

New perspectives on marketing

Recently, firms have dramatically changed their marketing programs due to enormous shifts in their
environments like rapid technological developments, more customer empowerment, the growth of
interactive and mobile marketing and globalization. These changes give customers and companies new
capabilities with a number of implications for the practice of brand management:

Customers can:

• Wield substantially more customer power;

• Purchase a greater variety of products and services;
• Obtain a great amount of information about everything;
• More easily interact with marketers in placing and receiving orders;
• Interact with other consumers and compare notes.

Companies can:

• Operate a powerful new information and sales channel with augmented geographic reach to
inform and promote their company;
• Collect richer information;
• Facilitate two-way communication with their customers and prospects;
• Send ads, coupons, etc. by e-mail to those who give them permission;
• Customize their offerings to individuals;
• Improve their purchasing, recruiting, training, and communication.

Integration and personalization have become increasingly crucial factors in building and maintaining
strong brands, as companies strive to use a broad set of tightly focused, personally meaningful activities to
win customers.
Integrating marketing

Channel-/communication-/pricing strategies and other marketing activities can enhance or detract from
brand equity. One implication of the customer-based brand equity is that the manner in which brand
associations are formed doesn’t matter; only the resulting awareness, strength, favorability, and
uniqueness of those associations does. Marketers should therefore evaluate all possible means to create
knowledge, considering efficiency, cost, and effectiveness.

Schultz, Tannenbaum, and Lauterborn define integrated marketing communications in terms

of contacts = any information-bearing experience that a customer/prospect has with the brand, the
category, or the market. A person can come into contact with a brand e.g. via friends, packages, magazines,
stores, customer service, etc.

Chattopadhyay and Laborie: there are many different ways to build brand equity, but also many firms to
build their brand equity. You must think creatively and originally to create programs that can connect with
customers. When trying unconventional methods and being creative, you must not sacrifice the goal of
brand building and develop programs to provide integrated solutions and customer experiences that create
awareness, spur demand, and cultivate loyalty.

Personalizing marketing

In the modern economy, there is an increased consumer desire for personalization because of
individualization. This led to a focus on experiential- and relationship marketing:

Experiential marketing = promotes a product by not only communicating a product’s features and
benefits but also connecting it with unique and interesting consumer experiences. The idea is not to sell
something, but to demonstrate how a brand can enrich a consumer’s life. The experience economy of Pine
& Gilmore:

• Commodity business à if you charge for stuff;

• Goods business à if you charge for tangible things;
• Service business à if you charge for the activities you perform;
• Experience business à if you charge for the time customers spend with you.

Berndt Schmitt: experiential marketing = any form of customer-focused marketing activity that creates a
sensory-emotional connection to customers. Types of marketing experiences linked to the brand
experience scale:

• Sense marketing appeals to the five senses à sensory;

• Feel marketing appeals to inner feelings and emotions à affective;
• Think marketing appeals to the intellect in order to deliver cognitive, problem-solving
experiences to engage customers à intellectual;
• Act marketing targets physical behaviors, lifestyles, and interactions à behavioral;
• Relate marketing creates experiences by taking into account social desires à not in the brand
experience scale.

Customers want to be entertained, stimulated, emotionally affected and creatively challenged.

Meyer and Schwager: the customer experience management (CEM) process involves monitoring these
patterns: past patterns (evaluate completed transactions), present patterns (track current relationships),
and potential patterns (conduct inquiries in the hope of finding new opportunities).

Relationship marketing = transcending the actual product/service to create stronger bonds with
consumers and to maximize brand resonance, based on the premise that customers are the key to long-
term brand success. It attempts to provide a more holistic, personalized brand experience in order to create
stronger ties with customers by expanding both the breadth and depth of marketing programs. Benefits:
 • Acquiring new customers can cost 5 times as much as retaining current ones;
• The average company loses 10% of its customers a year;
• When the customer defection rate is reduced by 5%, profits can increase by 25-85%;
• The customer profit rate tends to increase over the life of the retained customer.

Concepts that can be helpful with relationship marketing are mass customization, one-to-one marketing,
and permission marketing:

Mass customization = making products to fit the customer’s exact specifications. Customers can
communicate their preferences to the manufacturer online, which then assembles the product for a price
comparable to that of a non-customized item. Many service organizations develop customer-specific
services and try to improve the personal nature of their service experience. An advantage at the supply side
is that retailers can reduce inventory. However, not every product is easily customized and product returns
are problematic.

One-to-one marketing = consumers help add value by providing information to marketers, and marketers
add value by taking that information and generating rewarding experiences for consumers. The firm then
can create switching costs, reduce transactions costs, and maximize utility for consumers. This helps
building strong, profitable relationships. Fundamental strategies of one-to-one marketing:

• Focus on individual consumers;

• Respond to consumer dialogue via interactivity;
• Customize products and services.

Permission marketing = the practice of marketing to consumers only after gaining their explicit
permission. Consumers don’t like to be interrupted by marketing but do like receiving messages they gave
permission for. By eliciting customer cooperation by giving customers some inducement (e.g. a free
sample) for their permission, marketers might build stronger relationships with customers. Godin’s steps
to effective permission marketing:

1. Offer an incentive to volunteer;

2. Offer the interest prospect a curriculum over time, teaching him about the product being
marketed;
3. Reinforce the incentive to guarantee that the prospect maintains his permission;
4. Offer additional incentives to gain more permission;
5. Over time, leverage the permission to change consumer behavior toward profits.

A disadvantage is that permission marketing assumes that consumers know what they want. Marketers
must recognize that consumers may need to be given assistance in forming their
preferences. Participation marketing = when marketers and consumers work together to find out how
the firm can satisfy consumer goals best.

Reconciling the different marketing approaches

From a branding point of view, the approaches are useful means of eliciting positive brand responses and
creating brand resonance to build customer-based brand equity. Mass customization, one-to-one- and
permission marketing can potentially engage consumers more actively. These three might be effective at
creating greater relevance, stronger behavioral loyalty, and attitudinal attachment. Experiential marketing
is particularly effective at establishing brand imagery and tapping into a variety of different feelings as well
as helping to build brand communities. All four approaches can build stronger bonds between brands and
consumers.

An implications of these approaches may be that the marketing mix (4 P’s) may not fully describe modern
marketing programs. However, firms must still devise the 4 P’s as part of their program. The specifics of
how they set their pricing, product, and distribution strategies must be changed considerably.

Product strategy
Perceived quality = customers’ perception of the overall quality of a product compared to alternatives and
with respect to its intended purpose. Specific attributes of product quality, consistent with the brand
resonance model, can be divided into these dimensions: primary ingredients and supplementary features,
product reliability, durability and serviceability, and style and design. Product quality depends not only on
functional performance but also on broader performance considerations like delivery and customer
service. The augmented product aspects like symbolism and the personality reflected in the brand are often
crucial to the brand equity. Consumers may base their evaluations just on simple heuristics, decision rules
based on brand reputation or product characteristics.

Product strategies should focus on purchase (Proctor & Gamble’s ‘first moment of truth) and consumption
(second moment of truth). Aftermarketing = those marketing activities that occur after the purchase.
Innovative design, thorough testing, quality production, and effective communication enhance product
consumption experiences that build equity.

Marketers may need to use other means to enhance consumption experiences, like user manuals, customer
service programs, and loyalty programs:

User manuals that are too complicated, may make consumers’ initial product experiences frustrating.
Marketers must develop manuals that comprehensively describe what the product can do and how
consumers can realize these benefits. User manuals increasingly may need to appear in online and
multimedia formats.

Customer service programs: there is a crucial need to better balance the allocation of marketing funds
between conquest activities (e.g. advertising) and retention activities (e.g. customer retention programs).
Creating stronger ties with consumers can be as simple as creating a well-designed customer service
department. Aftermarketing can be the sales of complementary products that enhance the value of the core
product. It can be an important determinant of profitability; aftermarketing sales are strongest when
customers are locked in.

Loyalty/frequency programs’ purpose is identifying, maintaining, and increasing the yield from firm’s
‘best’ customers through long-term, interactive, value-added relationships. Loyalty programs reduce
defection rates and increase retention. The value created by those programs, increases switching costs for
your customers and gives you a better competitive position. 15% of a retailer’s most loyal customers can
account for half its sales, and it can take 12-20 customers to replace a lost loyal one. How to build effective
loyalty programs:

• Know your audience: employ sophisticated databases;

• Change is good: constantly update the program to attract new customers;
• Listen to your best customers: they can lead to improvements in the program;
• Engage people: make them feel special.

Marketers must develop products in a way that creates a positive brand image with strong, favorable, and
unique brand associations; elicits favorable judgments and feelings about the brand; and fosters greater
degrees of brand resonance. Product strategy entails choosing benefits the product will embody and
marketing activities that consumers desire and the marketing program can deliver. A range of possible
associations can become linked to the brand. Perceived value and quality are the most important ones.
Relationship marketing has become a branding priority.

Price strategy

Consumers often rank brands according to price tiers in a category. Within any price tier, there is a range
of acceptable prices, called price bands = indicate the flexibility and breadth marketers can adopt in
pricing their brands within a tier. Besides mean and variance price perceptions, consumers have
perceptions with a more inherent product meaning. They may infer the quality based on the price for
example. Costs are not only monetary, but can also be time, energy, and psychological costs. Value-based
pricing strategies = attempts to sell the right product at the right price.
When choosing a pricing strategy to build brand equity you have to determine a method for setting current
prices and a policy for choosing the depth and duration of promotions and discounts. Many firms employ a
value-pricing approach to setting prices and an everyday-low-pricing (EDLP) approach to determining
their discount pricing policy over time:

Value pricing = pricing with the objective to uncover the right blend of product quality, costs, and prices
that satisfies the needs and wants of consumers the profit targets of the firm. Brand lessons emerged from
the ‘Marlboro episode’ wherein Marlboro dramatically decreased the prices of its cigarettes: strong brands
can command price premiums, but not excessive premiums. Price increases without investments in the
brand value increase the vulnerability of the brand to lower-priced competition, because consumers then
no longer are convinced that the brand is worth its price.

An effective value-pricing strategy should balance three key components: product design & delivery, costs,
and prices:

Product design and delivery: consumers are willing to pay more if they receive additional
benefits/perceive added value. The creation of strong brand differentiation has led to price premiums, both
offline and online.

Product costs: costs should be lowered as much as possible. However, cost reductions cannot sacrifice
quality, effectiveness, or efficiency.

Product prices: understand exactly to what extent consumers value your brand and how much they will
pay a premium over product costs.

Combined, the three components above create value. However, consumers also have to understand and
appreciate this value. Therefore marketers need to engage in marketing communications to help
consumers better recognize the value.

Different consumers may have different value perceptions and could receive different prices. Price
segmentation = setting and adjusting prices for different market segments. Partly because of the internet,
firms are increasingly employing yield management principles/dynamic pricing (e.g. looking at credit
history or basing prices on the popularity of seats in an arena).

Everyday low pricing (EDLP) is a more consistent set of everyday base prices on products. However, price
premiums and sales also have their advantages.

Forward buying = when retailers order more products than they plan to sell during the promotional
period so that they can sell the overstock at a larger margin after that period. Diverting = retailers pass
along or sell the discounted products to retailers in other areas. Both can hurt manufacturers.

To build brand equity, marketers must determine pricing strategies and adjust those. Value pricing strikes
a balance among product design, costs, and prices. Consumers must find the price appropriate and fair.
There is always tension between lowering pricing and increasing consumer perceptions.

Discount are often an expensive way to add value compared to brand-building marketing activities, because
the lost revenue from lower margins is often greater than the additional costs of value-added activities.

Channel strategy

Marketing channels = sets of interdependent organizations involved in the process of making a product
available for use/consumption. Possible channel types are classified into direct channels (selling through
personal contracts from the company to prospective customers) and indirect channels (selling through
third-party intermediaries like retailers). Direct channels may be preferable when product information
needs and customization are high, and when quality assurance, purchase lot size, and logistics are
important. Indirect channels are preferable when a broad assortment is essential, availability is critical,
and after-sales service is important. Channels blend three key factors: information, entertainment, and
experience.

The best strategies nowadays are the ones that integrate internet, phone, stores and catalogs. The risk with
this hybrid channels is having too many channels, which leads to conflict or lack of support, or too little few
channels, which leads to opportunities being overlooked. The goal is to maximize channel coverage and
effectiveness while minimizing cost and conflict.

Indirect channels

Through their inventory and the means by which they sell, retailers strive to create their own brand equity.
Simultaneously they can have an influence on the brands they sell, especially on the brand-related services
they can provide or support. The interplay between the store’s and the brand’s image is important.

Shopper marketing = emphasizes collaboration between manufacturers and retailers on in-store

marketing like brand-building displays designed to capitalize on a retailer’s capabilities and its customers.
Shopper marketing can spur greater brand sales, but can also cause conflict. Retailers have the power to
set the terms of trade with manufacturers, which means they can command more frequent and lucrative
trade promotions. Manufacturers must employ a pull strategy to regain some of their lost leverage:
creating strong brands that consumers will ask for at the retailer’s. Push strategy = when the
manufacturer devotes his selling efforts to the channel members. Most successful manufacturers use both
strategies.

In many markets, dealers have captured more of the retail sales, so manufacturers must keep them happy
and profitable if they want the benefits of a smooth supply chain. Components of partnership strategies
are:

Retail segmentation: retailers may need to be divided into segments because of their different marketing
capabilities and needs. They are, in fact, customers too. Branded variants = branded items in a diverse set
of durable and semi-durable goods categories that are not directly comparable to other items carrying the
same brand name. They are a means to reduce retail price competition because they make direct price
comparisons difficult.

Cooperative advertising: the manufacturer pays for a portion of the retailer’s advertising for the
manufacturer’s product, if the retailer’s advertising adheres to certain specifications. It focuses more on
the local level where communication efforts may have more relevance and impact. However, because the
efforts are partly controlled by the retailer, there is a risk that the wrong message is communicated.

Direct channels

Some manufacturers introduce their own outlets or company-owned stores in order to gain control over
the selling process and to build stronger customer relationships. Pop-up stores = temporary stores that
blend retail and event marketing.

Benefits of company stores are that they are a means to showcase the (varieties of the) brand in a manner
not easily achieved through normal retail channels. also they can function as a test market to gauge
consumer response. A disadvantage is that some manufacturers lack the skills/resources/contacts to
operate as a retailer. Also, there may be conflicts with existing retailers and distributors. Company stores
can be a way of bolstering brand image and building brand equity (then stores are seen as
attractions/advertisements instead of ways to generate profits).

Some marketers create their own shops within major department stores, as store-within-a-store. The
goal is to find a win-win solution that benefits channels partners and consumers alike. Products can also
be sold directly to consumers via phone, mail, or electronically (direct selling). Consumers like to order
online and pick up or return in a physical store. They also like to browse potential purchases online but to
buy them in the store, after they felt/tried/have seen the product.
Back to top

Chapter H. Developing a brand equity measurement

and management system
The previous chapters described strategies/approaches to building brand equity. In the next three, we will
take a look at what consumers know and feel about and how they act toward brands and how marketers
can develop measurement procedures to assess how well brands are doing. Given that the CBBE concept is
the differential effect that brand knowledge has on customer response to marketing, there can be two
approaches. Indirect approach = assesses potential sources of CBBE by identifying and tracking
consumers’ brand knowledge. Direct approach = assesses the actual impact of brand knowledge on
consumer response to different aspects of the marketing program. These two approaches are
complementary.

Brand equity measurement system = a set of research procedures designed to provide marketers with
timely, accurate, and actionable information about brands so they can make the best possible tactical
decisions in the short run and strategic decisions in the long run. The goal is to achieve a full understanding
of the sources and outcomes of brand equity and to be able to relate the two as much as possible. The ideal
system would provide complete, up-to-date, and relevant information about the brand and its competitors
to the right decision makers at the right time within the organization. Three steps toward achieving that
ideal are conducting brand audits, designing brand tracking studies, and establishing a brand equity
management system.

The new accountability

Return of marketing investment (ROMI) = every marketing dollar spent justified as effective and
efficient. Up to 70% of marketing expenditures cannot be linked to short-term incremental profits. New
tools and procedures are needed to clarify and justify the value of expenditures.

Conducting brand audits

Brand audit = a comprehensive examination of a brand to discover its sources of brand equity. It is an
inspection of an outside firm with a report about the firm’s financial health as the outcome. Marketing
audit = a comprehensive, systematic, independent, and periodic examination of a company’s marketing
environment, objectives, strategies, and activities with a view of determining problem areas and
opportunities and recommending an action plan to improve the company’s marketing performance. Three
steps of a marketing audit are agreement on objectives, scope, and approach; data collection; and report
preparation and presentation. It is internally- and company-focused.

A brand audit is more externally- and consumer-focused and requires understanding of the sources of
brand equity from the firm’s and the consumers’ perspective. It can set strategic direction for the brand,
and should be conducted on a regular basis. Brand audits provide background information for managers
as they set up their marketing plans and can have profound implications on brands’ strategic direction and
resulting performance.

Its two steps are brand inventory and brand exploratory:

Brand inventory’s purpose is to provide a current, comprehensive profile of how all the products/services
sold by a company are marketed/branded. All brand elements, attributes, policies and other marketing
activities related to the brand are collected. The outcome should be an accurate, comprehensive, and up-
to-date profile of how the product is branded. Competitive brands should also be profiled to determine
PODs and POPs.

The brand inventory helps suggest on what consumers’ perceptions may be based. It can also supply useful
analysis and initial insights into how brand equity may be better managed. Also, a thorough brand
inventory should be able to reveal the extent of brand consistency, while revealing a lack of perceived
differences among different products sharing the brand name that are designed to differ on key dimensions.
An inventory could help uncovering undesirable redundancy and overlap that could lead to confusion and
resistance from consumers and retailers.

Brand exploratory = research directed to understanding what consumers think and feel about the brand
and how they act toward it in order to better understand sources of brand equity as well as any possible
barriers. First it is important to look for prior research studies. Second, internal personnel should be
interviewed to gain an understanding of their beliefs about consumers perceptions. Additional research is
required to better understand customers (how they shop, and what they feel and think about brands). The
brand exploratory’s first step often employs qualitative research techniques followed by more focused
survey-based quantitative research.

Levy: Three criteria by which a quantitative technique can be classified/judged are direction (if it is
related to the person or the brand), depth (the extent to which responses are superficial and concrete),
and diversity (the way the information relates to other information gathered). The more specific the
question, the narrower the range of information the respondent will give. More abstract and symbolic
techniques result in more information, but it is important to follow up with other questions that clearly
reveal the reasons behind that information. Ideally, there should be varied in direction, depth, and
technique. Accurate interpretation is needed of what respondents explicitly say and implicitly mean.

Mental map = portrays in detail all salient brand associations and responses for a particular target
market. Core brand associations= abstract associations that characterize the 5 to 10 most important
brand dimensions. These associations can form the basis of the positioning in terms of how they create
PODs and POPs.

Brand concept map (BCM) = elicits individual brand maps and combines them into a consensus map. In
the brand elicitation stage the respondents are provided with a set of associations used in the mapping
stage, wherein respondents were provided with a set of associations to build an individual brand map. In
the third stage, the aggregation stage, individual maps are analyzed and common thinking uncovered.

One goal of research in the brand exploratory is a clear and comprehensive profile of the target market.
Marketers use personas which represent detailed profiles of target consumers.

A more definitive assessment of the awareness, strength, favorability, and uniqueness requires quantitative
research. All potentially salient associations identified in the qualitative phase should be assessed, often
also for competitors.

Brand positioning and the supporting marketing program

The brand explanatory uncovers the current knowledge and determines the desired awareness, image,
PODs and POPs. The ideal brand positioning balances these key considerations:

• What customers currently believe about the brand;

• What they will value in the brand;
• What the firm is currently saying about the brand;
• Where the firm would like to take the brand.

Once you have a good understanding from the brand audit of current knowledge structures and once you
have decided on the desired structures for optimal positioning, you still may want to do additional research
testing alternative tactical programs to achieve that positioning.

Designing brand tracking studies

Brand tracking studies collect information from consumers on a routine basis over time, usually through
quantitative measures of brand performance on a number of key dimensions that can be identified in the
brand audit or other means. They play an important role in monitoring the health of the brand and its equity
and can help marketers better understand important considerations like category dynamics, consumer
behavior, competitive vulnerabilities and opportunities, and marketing effectiveness and efficiency.

What to track

Product-brand tracking = tracking an individual branded product. You ask consumers which brands are
at the top of their minds, move from general to specific questions, and measure all associations that may
distinguish competing brands. The specific brand associations (potential source of equity), benefit
associations (key POPs and PODs), and attribute beliefs that underlie the benefit associations should be
measured in order to help explain changes in more evaluative benefit beliefs for a brand. The key brand
associations that make up the potential sources of brand equity should be assessed based on strength,
favorability, and uniqueness in that order. When associations are not strong enough, their favorability
doesn’t matter, and if they are not favorable enough to influence consumers’ decisions, their uniqueness
does not matter.

Corporate or family brand tracking = tracking the corporate/family brand

separately/concurrently/both with individual products. Questions should reflect the level and nature of
experience your respondents are likely to have had with the company. Important is which products the
brand reminds consumers of and which are most influential in affecting consumer’s brand perceptions.

Global tracking = if the tracking covers various geographic markets, you need a broader set of background
measures.

How to conduct tracking studies

Elements used are often the brand name, but also the logo for example.

Whom to track: there is often concentrated on current customers, but you can also track non-customers
who may not be loyal to other brands and probably willing to switch. The market can be divided into light
and heavy users. Other types of customers, like channel members and other intermediaries, can be tracked
to better understand their beliefs about the brand. Such tracking is especially important in service
organizations where personnel is closely involved in affecting brand equity.

When and where to track: continuous tracking studies collect consumer information continually over
time. These smooth out abnormalities, unusual marketing activities, wrongly targeted events or an unlikely
occurrence in the marketing environment to provide a more representative set of baseline measures. The
frequency of such studies depends on the frequency of purchase, consumer behavior and marketing activity
in the category. The more stable and enduring the associations (the more mature the market), the less
frequent tracking is necessary.

How to interpret tracking studies: measures must be as reliable and sensitive as possible so they can
detect subtle shifts. Therefore, questions must be phrased in a comparative way and appropriate
benchmarks should be used. Such benchmarks can help comparing the brand to competitors and assessing
the productivity of brand marketing teams. There must be allowed for respondents who don’t have an
opinion and there must be accounted for the nature of the category (high- versus low involvement). One of
the most important tasks is to identify the determinants of brand equity like PODs and marketing activities
that have the most effective impact on brand knowledge.

Establishing a brand equity management system

Brand tracking studies and audits can provide a lot of information about how to build and measure brand
equity. A good system to measure brand equity should decrease the likelihood that managers make bad
decisions and increase the likelihood that they make good decisions about the brand. One of the biggest
threats to brand equity comes from within the organization, and the fact that marketing managers often
have their job for a limited period of time. That results in short-time perspectives and a lacking
understanding and appreciation of brand equity (running the brand ‘without a license’).
To cope with those threats, many organizations made internal branding a top priority. Brand equity
management system = a set of organizational processes designed to improve the understanding and use
of the brand equity concept within a firm. Steps to implement such a system are creating brand charters,
assembling brand equity reports, and defining brand equity responsibilities.

Step 1. Brand charter

Brand charter = a document that provides relevant guidelines to marketing managers within the company
as well as to key partners outside the company such as marketing research suppliers or ad agency
personnel. It is used to formalize the company view of brand equity and should:

• Define the firm’s view of branding and brand equity and explain why it is important;
• Describe the scope of key brands;
• Specify what the actual and desired equity is and define and clarify POPS, PODs, and the brand
mantra;
• Explain how brand equity is measured;
• Suggest how marketers should manage brands with guidelines;
• Outline how to devise marketing programs along specific tactical guidelines;
• Specify the proper treatment of the brand in terms of trademarks, design, packaging, and
communications.

The charter should be updated annually and when new products are introduced, marketers should reflect
these adequately in the charter.

Step 2. Brand equity report

Brand equity report = a gathering of the results of the tracking survey and other relevant performance
measures for the brand to be distributed to management regularly. It should describe what is happening
with the brand and why and include all relevant internal measures of efficiency/effectiveness and external
measures of brand performance and sources/outcomes of equity. It should also summarize consumers’
perceptions and behavior, and descriptive market-level information.

Marketing dashboards provide comprehensive but actionable summaries of brand-related information.

They should use the right models for extensive thinking and management should sufficiently invest in them
to keep them up to date and to keep staff actively involved.

Step 3. Brand equity responsibilities

To develop a brand equity management system that will maximize long-term brand equity, organizational
responsibilities and processes with respect to the brand must be well defined. The implementation of the
brand charter and equity reports should be centrally coordinated.

This can for example be done by a Chief Brand Officer (CBO) who reports directly to the CEO. Also, periodic
brand development reviews can be organized, during which brand-sensitive material, the status of key
brand initiatives, brand-sensitive projects, and new production and distribution strategies are reviewed.
Also, brand positioning conflicts could be resolved during such review meetings.

Senior management should determine the marketing budgets and oversee the allocation of company
resources. They can base such decisions on the outcomes of the brand equity measurement systems. The
marketing function should be organized in such in way in that brand equity is optimized. More and more
firms are hiring special brand managers nowadays and involve themselves in category management. This
way, they are attempting to redesign their marketing organizations to better reflect the challenges faced
by their brands. Because many firms are exploring other ways to conduct their marketing functions, the
traditional marketing department is disappearing. The biggest challenge for a multiple-product, multiple-
market organization, is in assuring that both product and place are in balance. This can be hard due to lack
of oversight.
External relationships with suppliers and marketing partners must be managed carefully. Firms have been
consolidating (continuing) their marketing partnerships and reducing the number of their outside
suppliers. The less suppliers you work with, the better their understanding of your brand. Marketing
partners should be provided with a brand charter so they can provide more brand consistent support.

Chapter I. Measuring sources of brand equity:

capturing customer mind-set
Marketers use mental maps to understand the current and desired brand knowledge
structure of consumers. Knowing this information is crucial to effectively building and
managing brand equity. However, it is hard to measure it because a lot of information
only resides in consumers’ minds. This chapter highlights some of the important
considerations critical to the measurement of brand equity. In general, measuring
sources of equity requires that the brand manager fully understands how customers shop
for and use products and what they know, think, and feel about and how they act toward
brands.

Qualitative research techniques

Qualitative research techniques = relatively unstructured approaches used to identify

possible brand associations and sources of equity. Several techniques can be used:

Free association

Subjects are asked what comes to mind when they think of the brand, without any more
specific cue than perhaps the product category. This is used to identify the range of
possible associations in consumers’ minds. It may also provide a rough indication of the
relative strength, favorability, and uniqueness of the associations. Follow-up questions
can be asked about those characteristics. Such questions can also include direct questions
about who, what, when, where, why and how. Results are used to form a rough mental
map. Main issues are what types of cues/probes to provide, and how to interpret the
results. It is best to move from general to specific questions.

Projective techniques

In some situations, consumers may not want to express their true thoughts or feelings.
Then they may find it easier to fall back on stereotypical answers they think would be
acceptable. Also, they may just find it hard to express their true feelings. Projective
techniques = diagnostic tools to uncover the true opinions and feelings of consumers
when they are unwilling or otherwise unable to express themselves on these matters.
Consumers are presented with an incomplete stimulus and asked to complete it, or are
given an ambiguous stimulus and are asked to make sense of it. In the process, they will
probably reveal their true feelings.

Rorschach test = respondents are presented with ink blots and asked what they remind
them of. That way they may reveal certain facets of their own, subconscious, personality.

Bubble exercise = respondents are asked to fill in the empty text/thought balloons in a
cartoon. This can be useful for assessing user and usage imagery for a brand.
Comparison task = respondents are asked to convey their impressions by comparing
brands to people, countries, animals, etc. followed by a follow-up question (Why this
comparison?). This can provide information about the psyche of the consumer with
respect to the brand. It is useful in imagery associations, to assemble a rich image for the
brand.

Archetype = a fundamental psychological association, shared by the members of the

culture, with a given cultural object. Different cultures have very different archetypes for
the same objects.

Zaltman Metaphor Elicitation Technique (ZMET)

ZMET is based on a belief that consumers often have subconscious motives for their
purchasing behavior.

ZMET = a technique for eliciting interconnected constructs that influence thought and
behavior, where a construct is an abstraction created by the researcher to capture
common ideas, concepts, or themes expressed by customers. The use of ZMET teases out
hidden thoughts and feelings about a topic, which can be expressed best using metaphors.

Neural research methods

Neuromarketing = the study of how the brand responds to marketing stimuli, including
brands. It has been used to measure emotional responses of consumers to
products/brands. Many purchase decisions appear to be largely an unconscious habitual
process instead of logical weighing of variables. This kind of research is very costly and
is not universally accepted (yet).

Brand personality and values

Brand personality = the human characteristics/traits that consumers can attribute to a

brand. It can be measured by soliciting open-ended responses, in which examples can
serve as a guide. Other means to capture consumers’ point of view are giving them a stack
of pictures or magazines (picture sorting studies). Brand personality and user imagery
may not always agree and can be very different. Jennifer Aaker created a brand
personality scale that reflects five factors (with underlying dimensions) of brand
personality:

• Sincerity (down-to-earth, honest, wholesome, and cheerful)

• Excitement (daring, spirited, imaginative, and up-to-date)
• Competence (reliable, intelligent, and successful)
• Sophistication (upper class and charming)
• Ruggedness (outdoorsy and tough)

Ethnographic and experiential methods

No matter how good a research design, consumers may never be able to completely
express their true feelings. Ethnographic research uses thick description based on
participant observation. Its goal is to extract and interpret the cultural meaning of
events/activities through various research techniques like consumer immersion, site
visits, shop-alongs, embedded research, etc. It can vary from observing consumers in
their homes to cross-functional customer visits in a B2B setting. Service companies often
use mystery shoppers to learn about the experiences provided by a company.

Summary

Qualitative research techniques are a creative means of gathering consumer perceptions

that may otherwise be difficult to uncover. Drawbacks are small samples from which the
results cannot always be generalized for a larger population. Also, results are hard to
interpret and different researchers may come to different conclusions based on the same
data.

Quantitative research techniques

Qualitative research uncovers and discovers, while quantitative research aims to prove
or disprove. It typically employs various types of scale questions instead of resulting in
verbal, open responses. Quantitative measures of brand knowledge can help to more
definitively assess the depth and breadth of brand awareness, the strength, favorability,
and uniqueness of the associations, the positivity of judgments and feelings, and the
extent and nature of brand relationships.

Brand awareness

Awareness is related to the strength of the brand in memory. Several measures are used
to measure awareness of brand elements.

Brand recognition requires consumers to identify the brand under a variety of

circumstances and can rest on the identification of any of the brand elements. Most subtle
measures are used for brands that have a high level of recognition. Recognition is
particularly important for packaging and the visibility of package design. One way to
check whether the visibility is sufficient, is using eye-tracking techniques. By applying
direct and indirect measures of brand recognition, it can be determined which brand
elements exist in memory, and how strongly they are associated with the brand.
However, it only provides an approximation of potential recallability. To determine
whether consumers will actually recall the elements under various conditions, measures
of brand recall are needed.

Brand recall is more demanding because consumers must actually retrieve the element
from memory. Unaided recall on the basis of all brands; provided as a cue will only
identify the strongest brands. Aided recall uses cues to help the consumer. When
combined, measures of recall based on product attribute/category cues and
situational/usage cues give an indication of breadth and depth of recall.

With certain types of added awareness or recognition measures, guessing may be a

problem.
Spurious awareness = when consumers erroneously claim they recall something they
really don’t and that may not even exist. This may send misleading signals about the
proper strategic direction for the brand.

Aided recall measures yield insight into how brand knowledge is organized in memory
and what kind of cues may be necessary for consumers to retrieve the brand from
memory. Category structure that exists in consumers’ minds can have profound
implications for consumer choice and marketing strategy.

Brand image

The brand image is reflected by the associations that consumers hold for it. It is useful to
make a distinction between lower-level considerations, related to perceptions of
performance and imagery attributes/benefits, and higher-level considerations related to
overall judgments, feelings, and relationships. Some issues in measuring lower-level
performance and associations are considered:

Beliefs = descriptive thoughts that a person holds about something.

Brand association beliefs = those specific attributes and benefits linked to the brand
and its competitors. Qualitative research can be used to uncover the different types of
associations making up the brand image. To better understand the ability of those
associations to serve as a basis for the positioning of the brand, belief associations based
on strength, favorability, and/or uniqueness can be assessed by using open-ended
questions. The outcomes of these belief associations can be rated in order of importance
(e.g. 1 = not at all unique, 7 = highly unique).

Multidimensional scaling = a procedure for determining the perceived relative images

of a set of objects, such as products or brands. it transforms consumer judgments of
similarity or preference into distances represented in perceptual space.

Brand responses

More general, higher-level considerations can be measured to find out how consumers
combine all the lower-level considerations in their minds to form different types of brand
responses/evaluations:

Purchase intentions = the likelihood of buying the brand or of switching to another

brand. They are most likely to be predictive of actual purchase when there is
correspondence between the two in these dimensions:

• Action (does the consumer buy for him-/herself or is it a gift?)

• Target (what is the type of product and brand?)
• Context (in what type of store is it bought, what are the prices in that store, and
what are other conditions?)
• Time (within a week, month, or year)

When asking consumers about their purchase intentions, the above dimensions should
be specified.
Net promoter score = the chance that a customer would recommend a product to others.
Promoters are the people who indicate a 9 or 10 on a 0-10 point scale. Those who gave a
0-6 are considered detractors. People who choose a 7 or 8 are passively satisfied and not
included in the analysis of the results.

Brand relationships

In chapter I, brand relationships were characterized in terms of brand resonance.

Measures for behavioral loyalty, attitudinal attachment, sense of community, and active
engagement (the four components of brand resonance) were provided. Now additional
considerations are considered.

Behavioral loyalty: consumers could be asked direct questions or be asked about

percentage of their past purchase (past purchase history) went to a certain brand in a
certain category or what percentage will in the future (intended future purchases). The
results can provide information about brand attitudes and usage for the brand, including
gaps in the market and the names of competitors that might be in the considerations set.

Attitudinal attachment: some researchers characterize brand attachment in terms of

‘brand love’ and use various scales to measure this. One approach defines attachments in
terms of two underlying constructs with sub-dimensions:

• Brand-self connection: to what extent do you feel connected & to what extent is
the brand part of who you are?
• Brand prominence: to what extent are your thoughts/feelings towards the brand
coming automatic & to what extent do they come naturally and instantly?

Sense of community: needs a more unstructured approach than behavioral loyalty and
attachment. Social currency = the extent to which people share the brand or information
about the brand as part of their everyday social lives at work or at home.

Active engagement = the extent to which consumers are willing to invest their own
personal resources in the brand beyond those resources expended during purchase or
consumption of the brand. In-depth measures can explore word-of-mouth and online
behavior, e.g. the extent of customer-initiated versus firm-initiated interactions.

Susan Fournier argues that brands can and do serve as viable relationship partners. The
everyday execution of the marketing mix decisions forms a set of behaviors enacted on
the part of the brand. These actions trigger a series of inferences regarding the implicit
contract that appears to guide the engagement of the consumer and brand and the type
of relationship formed. Brand personality then describes the relationship role enacted by
the brand in its partnership capacity. This view of brand personality provides guidance
to managers who wish to create and manage their brand personalities in line with
marketing actions than does the trait-based view, which indentifies general personality
tendencies that might (not) be connected to marketing strategies and goals.

Brand relationship quality (BRQ) = construct measuring a brand relationship quality

based on:
 • Interdependence = the degree to which the brand is incorporated in the
consumer’s daily course of living.
• Self-concept connection = the degree to which the brand delivers on important
identity concerns, tasks, or themes, thereby expressing a significant part of the
self-concept.
• Commitment = dedication to continued brand association and improvement of
the relationship, despite circumstances foreseen and unforeseen.
• Love/passion = affinity toward and adoration of the brand, particularly with
respect to alternatives.
• Intimacy = a sense of deep familiarity with and understanding of the essence of
the brand as a partner in the relationship and the nature of the consumer-brand
relationship itself.
• Partner quality = a summary judgment of the caliber of the role enactments
performed by the brand in its partnership role. It includes:
o An emphatic orientation toward the other;
o A character of reliability, dependability, and predictability of the brand;
o Trust or faith in the belief that the brand will adhere to established relationship
rules and be held accountable for its actions.

Comprehensive models of consumer-based brand equity

Besides the CBBE, there is another influential industry branding model.

BrandDynamics = a graphical model used to represent the emotional and functional

strength of relationship consumers have with a brand. The five levels in ascending order
of an increasingly intense relationship are presence, relevance, performance, advantage,
and bonding.

The CBBE model has four descending levels: identity, meaning, responses, and
relationships and specific concepts like salience, consideration, performance or quality,
superiority, and resonance.

Important aspects of this model are its emphasis on brand salience and breadth and
depth of brand awareness as the foundation of brand building; its recognition of the dual
nature of brands and the significance of both rational and emotional considerations in
brand building; and the importance it places on brand resonance as the culmination of
brand building and a more meaningful way to view brand loyalty.