Creating

Brand Equity
 Chapter Questions

• What is a brand and how does

branding work?
• What is brand equity?
• How is brand equity built, measured,
and managed?
• What are the important decisions in
developing a branding strategy?

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 ESPN: A Strong Brand

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 Steps in
Strategic Brand Management
• Identifying and establishing brand
positioning
• Planning and implementing brand
marketing
• Measuring and interpreting brand
performance
• Growing and sustaining brand value

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 What is a Brand?

A brand is a name, term, sign, symbol

or design, or a combination of them,
intended to identify the goods or
services of one seller or group of
sellers and to differentiate them from
those of competitors.

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 The Role of Brands

Identify
Identify the
the maker
maker

Simplify
Simplify product
product handling
handling

Organize
Organize accounting
accounting

Offer
Offer legal
legal protection
protection

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 The Role of Brands

Signify
Signify quality
quality

Create
Create barriers
barriers to
to entry
entry

Serve
Serve as
as aa competitive
competitive
advantage
advantage

Secure
Secure price
price premium
premium

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 What is Branding?

Branding is endowing
products and services with the
power of the brand.

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 What is Brand Equity?

Brand equity is the added value

endowed on products and services,
which may be reflected in the way
consumers, think, feel, and act with
respect to the brand.

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 Brand Knowledge

Thoughts Feelings

Knowledge

Images
Beliefs
Experiences

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 Advantages of Strong Brands

• Improved • Larger margins

perceptions of • More inelastic
product consumer response
performance • Greater trade
• Greater loyalty cooperation
• Less vulnerability • Increased marketing
to competitive communications
marketing actions effectiveness
• Less vulnerability • Possible licensing
to crises opportunities
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 Apple is a Strong Brand

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 What is a Brand Promise?

A brand promise is the marketer’s

vision of what the brand must be and
do for consumers.

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 Burger King Builds Its Brand with
Social Connectivity

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 Key Brand Equity Models

• Brand Asset Valuator

• BRANDZ
• Brand Resonance

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 BAV Key Components (Y&R)
Energized Differentiation: The degree to which a
brand is seen as different from others as well as
its pricing power
Relevance: the appropriateness and breadth
of a brand’s appeal

Esteem: perceptions of quality and loyalty, or how well

the brand is regarded and respected

Knowledge: how aware and familiar consumers are

with the brand and the depth of their experience

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 BAV Key Components (Cont..)
• Energized Differentiation and Relevance together
constitute Brand Strength (Indicator of future growth and
value)
• Esteem and Knowledge together create Brand Stature
(Indicator of past performance and current operating
value)
• Brand strength (vitality) and brand stature (emotional
capital) together constitute brand asset

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 BAV Key Components (Cont..)

• Low Brand strength/Low Brand stature:

New/unfocused/Fading Brands
• Low Brand strength/High Brand stature:
Eroding/Declining
• High Brand Strength/Low Brand Stature:
Niche/Momentum/Aspiring Brands
• High Brand Strength/High Brand Stature:
Leadership/Power Brands

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 Figure 9.2 Universe of
Brand Performance

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 BRANDZ Model of Brand Strength-
Brand Dynamics Pyramid (WPP and
Millward Brown)
• A system of brand equity measurements based on
MB’s Meaningfully Different Framework, that reveals
a brand’s current equity and opportunities for growth
• Brand Dynamics employs a set of simple scores that
summarize a brand’s equity and are relatable directly
to real world financial and business outcomes
• Three types of brand associations are crucial for
building customer predisposition to buy a brand –
meaningful, different and salient brand associations

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 BRANDZ Model of Brand Strength-
Brand Dynamics Pyramid (WPP and
Millward Brown)
• The success of the brand along those three
dimensions in turn is reflected in three
important outcome measures:
Power – a prediction of brand’s volume share
Premium – a brand’s ability to command a price
premium relative to the category average
Potential – the probability that a brand will grow
value share

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 Brand Resonance Model
• It views brand building as an ascending series of
steps, from bottom to top:
(1)Ensuring customer identity of the brand and
associate with a specific product class or need
(2)Firmly establishing the brand meaning in
customers’ minds by strategically linking a host of
tangible and intangible brand associations
(3)Eliciting the proper customer response in terms of
brand related judgment and feelings
(4)Converting customers’ brand response to intense,
active loyalty

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 Brand Resonance Pyramid

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 Brand Resonance Model
• Enacting the four steps means establishing a pyramid of six
“brand building blocks.
• The model emphasizes the duality of brands – the rational
route to brand building on the left side and the emotional
route is on the right side
• Brand salience – is how often and how easily customers think
of the brand under various purchase or consumption
situations – the depth and breadth of brand awareness
• Brand performance – is how well the product or service
meets customers’ functional needs
• Brand imagery – describes the extrinsic properties of the
product or service, including the ways in which the brand
attempts to meet customers’ psychological or social needs
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 Brand Resonance Model

• Brand judgement – focus on customers’

own personal opinions and evaluations
• Brand feelings – are customers’
emotional response and reactions with
respect to brand
• Brand resonance – describes the
relationship customers have with the
brand and the extent to which they are in
sync with it
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 MasterCard Created An
Emotional Bond to its Brand

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 Drivers of Brand Equity

Brand Elements:
Bing from Microsoft

Marketing Activities: General Mills and its CMO

Meaning Transference: 42BELOW Vodka

from New Zealand
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 Brand Elements

Brand
names URLs

Slogans
Logos

Characters

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 Brand Names
• Ideally should be short and meaningful in nature (general
trend)
• Though long names like “I can’t believe it’s not butter” etc. (a
butter substitute introduced in 1981 and currently owned by
Unilever subsidiary) are also there. Also some long names in
successful Hindi movies in last 15/20 years e.g. DDLJ, HAHK,
K3G but where abbreviations are also remembered by people
• Also, brand names sometimes are changed in different
countries e.g. The Heartbrand (Unilever) has different names
in different countries (Wall’s in UK and most of Asia and other
names in many other countries); Snickers was Marathon in UK
earlier till 1990 and then changed

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 Brand Element Choice Criteria

• Memorable: Lux, LG
• Meaningful: Fair &
Lovely, Close Up
• Likeability: Maharaja
(Air India)
• Transferable:
Amazon.com
• Adaptable: Nano
• Protectable: Xerox
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 Slogans

• Just do it • We try harder

• Nothing runs like a • I’m lovin’ it
Deere • Innovation at work
• This Bud’s for you
• Always low prices

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 Designing Holistic Marketing Activities

Personalization

Integration

Internalization

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 Internal Branding

• Choose the right moment

• Link internal and external marketing
• Bring the brand alive for employees

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 Figure 9.5 Secondary Sources of
Brand Knowledge

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 Brand Communities

• E.g. Harley Davidson

• Concept of Cult Brands

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 Measuring Brand Equity
Brand
Brand Audits:
Audits: Assess
Assess health
health of
of
brand,
brand, uncover
uncover sources
sources and
and
improve
improve brand
brand equity
equity
Brand
Brand Tracking:
Tracking: Quantitative
Quantitative data
data
from
from consumers
consumers as as to
to how
how brands
brands
and
and marketing
marketing programs
programs areare
performing
performing
Brand
Brand Valuation:
Valuation: Total
Total
financial
financial value
value of
of the
the
brand
brand

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 Table 9.4
The 10 Most Valuable Brands

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 Figure 9.7 Interbrand Brand
Valuation Method

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 Managing Brand Equity

• Brand reinforcement
• Brand revitalization

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 Brand Value Chain

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Company Actions Competitor Actions

Channel Behavior

Customer Mind Set

Customer Behavior

Product Market Results

Financial Results

Stock Market Behavior/

Shareholder Value
41
 The Brand Value Chain
Marketing
Customer Brand Shareholder
Program
Mindset Performance Value
Investment
•Awareness •Price premiums •Stock price
•Product •Associations •Price elasticities •P/E ratio
•Trade •Attitudes •Market share •Market cap
•Employee •Attachment •Expansion success
•Other •Activity •Cost structure
•Communications •Profitability

Program Marketplace Investor

Quality Conditions Sentiment
Multipliers
•Clarity •Competitive reactions •Market dynamics
•Relevance •Channel support •Growth potential
•Distinctiveness •Customer size & profile •Risk profile
•Consistency •Brand contributions

Source: Keller and Lehmann (2003), How Do Brands Create Value, Marketing Management, May-June, 27-31
42
 Customer Mind-Set
Awareness

Associations (Image)

Attitude (Intention; Acceptability)

Attachment(Loyalty; Addiction)

Activity (WOM)
43
 Managing Brand Equity

Brand
Brand Reinforcement
Reinforcement

Brand
Brand Revitalization
Revitalization

Brand
Brand Crises
Crises

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 Devising a Branding Strategy

Develop
Develop new
new brand
brand
elements
elements

Apply
Apply existing
existing brand
brand
elements
elements

Use
Use aa combination
combination of
of
old
old and
and new
new

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 Branding Terms

• Brand line • Line extension

• Brand mix • Category extension
• Brand extension • Branded variants
• Sub-brand • Licensed product
• Parent brand • Brand dilution
• Family brand • Brand portfolio

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 Brand Naming

Individual
Individual names
names

Blanket
Blanket family
family names
names

Separate
Separate family
family names
names

Corporate
Corporate name-
name-
individual
individual name
name combo
combo

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 Reasons for Brand Portfolios

• Increasing shelf presence and retailer

dependence in the store
• Attracting consumers seeking variety
• Increasing internal competition within
the firm
• Yielding economies of scale in
advertising, sales, merchandising, and
distribution

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 Brand Extensions

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 For Review

• What is a brand and how does

branding work?
• What is brand equity?
• How is brand equity built, measured,
and managed?
• What are the important decisions in
developing a branding strategy?

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 Brand Roles in a Brand Portfolio

Flankers Cash Cows

Low-end High-end
Entry-level Prestige

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