Customer-Based Brand Equity

Chapter 2

Quiz
Develop the product category structure for Beverages.

Customer Based Brand Equity

Definition: The differential effect that brand knowledge has on consumer response to the marketing of that brand. There are three ingredients to this definition: Differential effect: brand equity arises from differences in consumer response. If no differences occur then brand name product can essentially be classified as commodity Brand knowledge: these differences in response are result of of consumer knowledge about the brand. Brand equity ultimately depends on what resides in the mind of the consumer Differential response by consumer that makes up the brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the marketing of a brand

1.

2.

3.

Making A Brand Strong : Brand Knowledge

The associative network memory model

 1. 2.

Memory consists of network of nodes and connecting links where : Nodes represent stored information or concepts Links represent the strength of association between this information or concepts Any type of information can be stored in the memory network ( verbal, visual, abstract or contextual) Recall or retrieval of information occurs through a concept called spreading activation

 At any point in time an information node may be

source of activation because it is either presented external information ( e,g. when a person reads or hear a word or phrase) or retrieve internal information information currently being processed (e.g. when a person thinks about some concept).
A particular node in memory is activated, and

activation spreads from that node to other nodes connected to it in memory.

When activation of a particular node exceeds its

threshold level, the contents of that node are recalled

The spread of activation depends on the number and

strength of the links connected to the activated node:

Concepts connected to the activated node whose linkages have the greatest strength will receive the most activation Brand knowledge is conceptualized as consisting of a brand node with variety of association linked to it.
As a result of spreading activation, the strength and organization of these brand association will be important determinants of the information that can be recalled about the brand to influence consumer response and brand related decisions Brand knowledge can be characterized in terms of two components: Brand awareness and Brand Image

Possible Apple computer associations User friendly Macintosh Educational fun Innovative Desktop publishing Apple logo Friendly cool creative Graphics

Power book

Sources of Brand Equity !

Attention Activities

Time Budgets

Attitudes to Advertising New Media

Places

Mood
Situation

Multi-Media Mix

Brand Awareness:

The strength of brand node, as reflected by consumers ability to identify the brand under different conditions

Brand awareness is created by increasing the familiarity of the brand through repeated exposure( for brand recognition) and strong association with the appropriate product category or other relevant purchase or consumption cues (Brand Recall) Brand Awareness can be characterized by depth and breadth a. Depth of brand awareness relates to the likelihood that the brand could be recognized or recalled b. Breadth of brand awareness relates to the variety of purchase and consumption situations in which brand comes to the mind

Consequences of Brand Awareness

1.

2.

>

Learning Advantages: Influencing the formation and strength of brand association that make up brand image The First step in building brand equity is to register the brands in the minds of consumers. Consideration advantages: Increases the likelihood that that a brand will be a member of consideration set

3.

Choice Advantages Can affect choices among brands in consideration set, even if there are no other brand associations Eg Low involvement decision settings: minimum level of brand awareness is enough for product choice. Low involvement results when consumers lack either purchase motivation( dont care about the product) or purchase ability( do not know anything else about the brands in a category.- young male student going grocery shopping ) Consumer may buy only more familiar, well established brands

Establishing Brand Awareness

1.
2.

3.

Increasing familiarity of the brand through repeated exposure The more a consumer, experiences the brand by seeing it, hearing it, or thinking about it, the more likely the brand is registered in the memory Any thing that causes consumer to experience a brand name, symbol, logo, character, packaging, slogan can potentially increase familiarity and awareness of that brand element

Strategies to increase brand awareness

1.

Visually and verbally reinforce the brand name with a full complement of reinforcing brand elements Develop a slogan or jingle that creatively pairs the brand and the appropriate category, purchase, or consumption cues ( and ideally, the brand positioning as well, in terms of also building a positive brand image) Additional use can be made of other brand elements logos, symbols, characters, and packaging

2.

Creatively pair the brand with its corresponding category or other appropriate cues through a wide range of communication options ( advertising, promotion, sponsorship, and public relations). The way the brand and its product category are paired( eg advertising slogan)will help in determining the strength of the product category links . For brands with strong category associations, eg Lipton tea, the distinction between brand recognition and brand recall may not matter much-consumers thinking of the category are likely to think of the brand.

Brand image:

Consumer perception of a brand as reflected by brand association held in consumer memory. Brand associations are other informational nodes linked to the brand node in memory and contains the meaning of the brand for consumers

1. 2.

3.

4.

A positive brand image is created when there are strong, favorable , unique associations links of the brand in memory Brand associations can also be created through: Direct experience Information communicated about the brand from other commercial, non partisan sources- media vehicles Word of mouth Assumptions or inferences from the brand itself( name, logo) Identification of a brand with company, country, person, place , event.

How Body shop built brand equity:

Strong associations to personal care and environmental concern happened through their: Products( natural ingredients, no animal testing) Packaging(simple, refillable, recyclable) Merchandising ( detailed point of sale posters, brochures, displays) Staff( encouraged to be enthusiastic, and informative regarding environmental issues Sourcing policies( using small local producers around the world) Social action program( requiring each franchisee to to run a local community program

Strength of Brand Associations

Associations to be linked sufficiently strong to the brand will depend on how the marketing program and other factors affect consumers brand experience Strength is a function of both the amount or quantity of processing that information receives and the nature or quality of that processing The more deeply a person thinks about about product information and relates it to existing brand knowledge, the stronger are the resulting brand association

Strength of Brand Associations

Two factors facilitating the strength of association to any any piece of information are the personal relevance of the information and the consistency with which this information is presented over time Associations that are recalled depend not only on strength of association but also in context in which brand is recalled

Favorable associations for the brand are desirable to consumers and are successfully delivered by the product and conveyed by the supporting marketing programs for the brand Desirability depends on 3 factors 1. How relevant consumers find the brand association 2. How distinctive consumers find the brand association How believable consumers find the brand association

Favorability of Brand Association

Favorable brand associations come in variety of forms. a. Intrinsic product related factors b. Abstract non product related imagery related to desirable users or usage situations for the brand Not all brand association will be deemed important viewed favorably by the consumers, nor will they be equally valued across different purchase or consumption situations

Uniqueness of Brand Associations

Unique brand associations are distinct associations not shared by competing brands Beliefs about unique attributes and benefits valued more favorably by consumers as compared to competitive offerings can lead to more favorable brand evaluation and greater likelihood of choice It is important to associate unique, meaningful points of difference to a brand to provide a competitive advantage and a reason why consumers should buy it

It may be sufficient that some brand associations are seen as roughly equal in favorability with competing brand associations. These associations should function as point of parity in consumers mind to negate points of difference for competitors. These associations are designed to provide, no reason why not for consumers to choose the brand

Eg Fedex vs Postal Service express mail

Fed Ex- leading overnight delivery service. It may be fast, dependable, convenient which are important in consumer choice under certain situationsSomeone may desire these benefits only when meeting a important deadline. If Someone needs a delivery as soon as possible than other less expensive options can be considered

Product/service category associations

Can be characterized by set of associations including specific beliefs about any member in the category, and overall attitudes toward all members.
- E.g. some attributes are prototypical, essential to all brands, and a specific brand can be considered to be the best and most representative- a running shoe should provide support, comfort, and be enduring, Nike best represents a running shoe.

Building a Strong Brand

1. Ensure identification of the brand with customers and an association of the brand in customers minds with a specific product class or customer need Who are you? (Brand Identity) 2. Firmly establish totality of brand meaning in the minds of customers by strategically linking a host of tangible and intangible brand associations with certain prospects What are you? ( Brand Meaning) 3. Elicit proper customer responses to this brand identification and brand meaning What about you? What o I think and feel about you? ( Brand Responses) 4. Convert brand responses to create intense, active loyalty relationship between customers and brand > What a about you and me? What kind of association and how much of a connection would I like to have with you ( Brand Relationship)

CUSTOMER-BASED BRAND EQUITY PYRAMID

4. RELATIONSHIPS = RESONANCE

What about you & me?

3. RESPONSE = JUDGMENTS FEELINGS What about you?

2. MEANING = PERFORMANCE IMAGERY What are you?

SALIENCE

1. IDENTITY = Who are you?

Brand Building blocks

Brand Salience
Brand salience refers to aspects of the awareness of the brand, eg: How often and easily is the brand evoked under various situations or circumstances. To what extent is the brand topof-mind and easily recalled or recognized? What types of cues are necessary?

1.

2.

3.

Salience Dimensions
Depth of brand awareness- likelihood that a
brand element will come to mind, and the ease with which it does so. Eg a brand that can be easily recalled has a deeper level of brand awareness, than one that can only be recognized.

Breadth of brand awareness- concerns the

range of purchase and usage situations in which the brand element comes to mind Depends on organization of product knowledge In memory

Tropicana Juice- Its not just for Breakfast anymore

Consumers should recognize the brand is presented or exposed to them. Should think of Tropicana whenever they think of orange juice, especially when considering purchase in that category( increase depth) Would ideally think of Tropicana whenever they decide which beverage to drink, especially when seeking a tasty but healthy beverage Thus they should think of Tropicana in terms of satisfying a certain set of needs. Marketing challenge is to link the product to usage situations outside traditional usage( increase breath)

Product category structure

How product categories are organized in consumers mind. Hierarchy of levels in consumers mind Product class information Product category information Product information Brand Information

Top down descision Soft drinks have greatest breath

Beverage

Water

Flavored

Non-alcoholic

Alcoholic

Milk

Juices Hot Beverage

Beverage Category Hierarchy Soft Drinks

Strategic Implication
In terms of building awareness it is not only the depth of awareness that matters but also the breadth of awareness and properly linking the brand to various categories and cues in consumers minds
It is important that the brand not only be top-ofmind and have sufficient mind share but also do so at the right times and places

For many brands, the key question not whether consumers can recall the brand but where they think of the brand, and how easily and often they think of the brand
In some cases the best route for improving sales of a brand is not by changing the attitudes of a brand but by increasing the breadth of awareness and situations in which consumer would consider using the brand-Campbell soupMmm Mmm Goodto versatile and contemporary

Brand Performance
Relates to the ways in which the product or service meets customers more functional needs Brand performance refers to the properties of the brand in terms of inherent product or service characteristics How well the brand rates on objective assessments of quality? To what extent does the brand satisfy utilitarian, aesthetic, economic customer needs and wants in the product or service category Any of the performance dimensions can relate to brand differentiation

Performance Dimensions

Primary characteristics & supplementary features

Customers often have beliefs about the levels at

which the primary ingredients of the product operate- soap

They may have beliefs about the special features

or secondary elements of a product that may complement these primary ingredients -Microwave

Some attributes are essential ingredients necessary

for the product to work, whereas other attributes are supplementary features that allow for customization and more versatile, personalized usage -BoomBox

Product reliability, durability, and serviceability

Reliability refers to the consistency of

performance over time and from purchase to purchase

economic life of the product

Durability refers to the expected Serviceability refers to the ease of

servicing the product if it needs repairs

Service effectiveness, efficiency, and empathy

Service effectiveness refers to how completely the

brand satisfies customers service requirements these services are delivered in terms of speed, responsiveness etc.

Service efficiency refers to the manner by which

Service empathy refers to the extent to which

service providers are seen as trusting , caring, and having the customers interest in mind

Style and design > Performance may also depend on sensory aspects how the products looks and feels, what it sounds or smells like Price
Price is a important performance association because

consumers often have strong beliefs about the price value of a brand and may organize their product category knowledge in terms of tiers of different brands ( price value relationship)

Brand Imagery
Deals with extrinsic properties of the product or service, including the ways in which the brand meets customers psychological or social needs Brand imagery is how people think about a brand abstractly,( intangible aspects) rather than what they think the brand actually does. Imagery associations can formed : Directly ( from a customers own experiences, and contact with the product, brand, target market, or usage situations) Indirectly ( brand advertisement, word of mouth) may result in a profile/mental image of actual or aspirational users.

1.

2.

Imagery Dimensions
User profiles Demographic characteristics-(brand gender , age , race, income) Psychographic characteristics( attitudes towards life, careers, possessions, social issues-brand user may be seen as traditional, conservative) Actual or aspirational Group perceptions popularity-market leaders Purchase & usage situations Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc.), location, and context of usage, type of activity

Imagery Dimensions
Personality & values Sincerity (down to earth, honest, cheerful, wholesome), excitement( daring, imaginative, up to date), competence (reliable, intelligent, successful), sophistication (upper class, charming), & ruggedness( outdoorsy, tough)

History, heritage, & experiencesNostalgia Memories

more broad based, may be related to the marketing program( color, packaging, company, country of origin, type of store, endorsers)

Brand Judgments
Focus on customers personal opinions and evaluation with regard to the brand Involve how customers put together all different performance and imagery associations of the brand to form different kinds of opinions In creating a strong brand four types of brand judgments are important:
1. 2.

Quality perceived quality attitude, perceptions of value, satisfaction Credibility-3 dimensionsPerceived expertise( is the brand seen as competent, innovative, market leader) Trustworthiness( dependable, keeping customer interests in mind) Likeability ( fun, interesting, worth spending time with)

3.

Consideration-depends on how personally relevant consumers find the brand and the likelihood that it will be included in the set of probable options,
Superiority- extent to which customers find the brand as unique and better than competitors

4.

Brand Feelings
Customers emotional responses and reactions with respect to the brand What feelings are evoked by the marketing program for he brand or by other means How the brand affect customers feelings about themselves and their relationship with others? (mild or intense, can be positive or negative ) Emotions evoked can be so strongly associated, they are accessible during product consumption

Feelings Dimensions
Warmth Soothing feelings (consumer feel sentimental, warm hearted, or affectionate for the brand)

Fun Upbeat feelings ( amused, lighthearted, joyous, playful, cheerful)

Excitement -Energizing( sense of elation, of being alive, being cool sexy, etc) Security- ( safety, comfort, and self assurance

Social approval ( positive feelings about the approval of others-they feel that others favorably on their appearance)
Self-respect ( feel better about themselves, sense of pride, accomplishment, fulfillment)

Brand Resonance
Refers to the nature of relationship and the extent to which customers feel that they are in-sync with the brand Characterized in terms of: intensity, or the depth of the psychological bond that customers Level of activity engendered by this loyalty ( repeat purchase rates, extent to which customers seek brand information) Brand Resonance can be broken into four components Behavioral loyalty Attitudinal attachment Sense of community Active engagement

1. 2. 3. 4.

Resonance Dimensions
Behavioral loyalty

Frequency and amount of repeat purchases ( share of category requirements)

Love brand (favorite possessions; a little pleasure) Proud of brand Kinship and Affiliation with other people associated to it ( Harley Davidson) Join club centered on a brand( get updates) Visit web site, chat rooms

Attitudinal attachment

Sense of community

Active engagement