CHAPTER 9

BUILDING AND MANAGING BRAND

EQUITY

YO U C A N N OT M A K E A B U S I N E S S C A S E T H AT YO U S H O U L D B E W H O
YO U ' R E N OT.
JEFF BEZOS
S E L L I N G TO P E O P L E W H O A C T U A L LY WA N T TO H E A R F R O M YO U I S
M O R E E F F E C T I V E T H A N I N T E R R U P T I N G S T R A N G E R S W H O D O N ' T.
SETH GODIN (AMERICAN AUTHOR)
 Brand Equity
o Brand equity is the set of assets and liabilities linked to the brand.

Brand Awareness

Brand
Equity

Brand
Brand Loyalty
Associations
Brand Equity
o There are three types of brand asset — brand awareness, brand
loyalty, and brand associations.
o Each creates formidable competitive advantages, and each needs to
be actively managed.
Brand Awareness
o In some industries that have product parity, awareness provides a
sustainable competitive difference.
o It differentiates brands along a recall/familiarity advantage.
o Advantages
o Provides the brand with a sense of familiarity, and people like the familiar.
For low involvement products, e.g. soap, detergents etc. familiarity can
drive purchase decision
Brand Equity
Brand Awareness
o Advantages
o It can be a signal of presence, commitment, and substance attributes that
can be very important even to industrial and consumer buyers. Intel
inside: perception of advanced technology
o The salience of a brand will determine if it is recalled at a key time in the
purchasing process.
o Brand dominance e.g. Surf, Crayola, Google, Nescafe etc.

o Brand Awareness is asset that can be extremely durable and thus

sustainable.
o Difficult to dislodge a brand that has achieved a dominant awareness.
o Brand Recognition: Ever heard of Jeep?
o Brand Recall: Which brands of 4x4 do you remember?
Brand Equity
Brand Awareness
o Brands with high recognition and low recall are termed graveyard
brands. High recognition means yesterday’s news but not visible.
o One route to visibility is to extend the brand over product categories.
Philips, Cadbury, SONY
o Another is to go beyond the normal media channels by using event
promotions, sampling, and other attention-grabbing approaches.
Head & Shoulders sachet sample given in stores
Brand Equity
Brand Loyalty
o Enduring asset for some businesses is the loyalty of the installed
customer base.
o Competitors may duplicate or surpass a product/service but their
customers keep switching.
o Brand loyalty can be based on simple habit, preference, experience
over a long time or switching costs.
Brand Equity
Brand Loyalty
o An existing base of loyal customers provides enormous sustainable
competitive advantages.
1. Reduces the marketing costs of doing business as existing customers
are easy to hold.
2. The loyalty of existing customers represents a substantial entry
barrier to competitors.
3. Relatively large, satisfied customer base provides an image of a
brand as an accepted and successful product that will include
service back-up and improvements.
4. Reassurance to other customers.
5. Brand loyalty provides the time to respond to competitive moves.
Brand Equity
Brand Loyalty
o Firms that manage brand loyalty:
1. Measure the loyalty of existing customers.
2. Conduct exit interviews with those who leave the brand, to locate
points of vulnerability.
3. Have a customer culture where people are empowered and
motivated to keep the customer happy.
4. Measure the lifetime value of a customer so expected future
purchases are valued.
5. Reward loyal customers with frequent-buyer programmes or special
unexpected benefits or premiums.
Brand Equity
Brand Loyalty
6. Make customers feel that they are part of the organization, perhaps
through customer clubs.
7. Have continuing communication with customers, using direct mail,
the Internet, toll-free numbers, and a solid customer back-up
organization.
8. Manage customer touch points to ensure that the brand does not
falter in key contexts.
9. Protect the relationship with the loyal customer base during tough
economic times when there are pressures on marketing budgets.
Brand Equity
Brand Associations
o Associations attached to a firm and its brands reflect the strategic
position of the brand.
o Brand association is directly or indirectly linked in the consumer's
memory to a brand.
o Product attributes and customer benefits are the reasons to buy and
form brand loyalty
o Heinz is the slowest-pouring (thickest) ketchup,
o Lahore a great historical city to visit,
o Volvo a safety car and
o Kellogg's Bran Flakes is a high-fiber cereal.
Brand Associations
Product Category
o The choice of a product category or subcategory to which a business
associates can have strategic implications.
o Red Bull positioned itself as an energy drink but associated with energy
needs of extreme sports.
o LinkedIn positioned itself as a social networking site for professionals.

Red Bull Homerun 2021:

The Unique Ski And Snow
Race In Malam Jabba, Pakistan
Brand Associations
Maintaining Relevance
o Relevance is perceived as associated with the product category in
which the customer is interested.
o Two conditions are required for relevance (Chapter 4).
1. There must be a perceived need or desire by customers for a
submarket defined by some combination of an attribute set, an
application, a user group, or other distinguishing characteristic.
2. The brand needs to be among the set considered to be relevant for
that submarket by the prospective customers.
Brand Associations
Trend Trend
Trend Drivers
Neglecters Responders

Maintaining Relevance
o Firm maintains relevance along a spectrum.
o Trend Neglecters - firms that miss or misinterpret trends because
they are too focused on a predetermined business model.
o McDonald’s after unsuccessful efforts to create salads, broke through with
not only salads that worked but healthy desserts and gourmet coffee.

o Trend Followers - firms that track closely the trends and the
evolution of categories and subcategories, making sure that their
products stay relevant
o Lego evolved as a wooden toy manufacturer to plastic bricks maker.
Brand Associations
Trend Trend
Trend Drivers
Neglecters Responders

Maintaining Relevance
o Trend Drivers - those firms that actually propel the trends that define
the category or subcategory.
o Zara responds quickly to customer trends by manufacturing in Europe and
designing clothing in-house.
Brand Associations
Breadth of Product Line
o A broad product offering signals substance, acceptance, leadership
and convenience of one stop shopping
o Amazon – Originally a book store, later repositions as a superior shopping
experience

Organizational Intangibles
o Difficult to copy an organization defined by values, culture, people,
strategy and programmes.
o Being global (HSBC or British Airways), innovative (Samsung), quality
(Toyota) etc.
Brand Associations
Emotional and Self-Expressive Benefits
o Emotional benefits relate to the ability of the offering to make the
customer feel something during the purchase or use experience. I
feel ….
o Safe while travelling in (Volvo)
o Energized while watching (YouTube)
o Rugged and strong while wearing (Timberland)

o Self-expressive benefits reflect the ability of the purchase and use of

an offering so the customer can express something. I am …
o Adventurous or daring while owning Rossignol skis
o Frugal while shopping at Kmart
o Taste conscious while cooking in Shan Masala
Brand Associations
The Experience
o The experience of using the brand could include emotional or self-
expressive benefits without functional advantage
o More rewarding when all three elements are included
Being Global
o Functional benefits that you can access the services anywhere. E.g.
Visa
Being Contemporary
o Challenging for organizations to have energy, vitality and being
relevant in today’s marketplace
Brand Associations
Brand Personality
o A business with a personality tends to be more memorable and liked.
o Upmarket and sophisticated (Prada)
o Active and tough (Timberland)
o Professional and competent (BBC)

o RyanAir – cheapest fares, making flying affordable and feasible

Brand Identity
o Provides direction, purpose, and meaning for the brand.
o Set of brand associations that the firm aspires to create or maintain.
o Can be explained in 3 steps
1. What the brand stands for: Create a set of 6-12 different associations
desired for a brand. E.g. dynamic, flexible, world class, multicultural
2. The core identity: Prioritize the brand identity elements.
Core identity elements are primary drivers of brand-building programmes.
3. The brand essence: Captures the heart of the brand. Communicates the
brand internally.
Tagline is designated to communicate brand essence
Audi’s “Advantage through Technology”
BMW’s “ultimate driving machine”