CHAPTER 2

CUSTOMER-BASED EQUITY AND

BRAND POSITIONING
Learning Objectives

 Define customer-based brand equity

 Outline the sources and outcomes of cus-
tomer-based brand equity
 Identify the four components of brand posi-
tioning
 Describe the guidelines in developing a
good brand positioning
 Explain how brand mantra is developed
Defining
Customer
Based Brand Equity
(CBBE)
 CUSTOMER BASED
• group of customers
• who repeatedly purchase the goods or
services of a business
• These customers are a main source of
for a company
considered the business's target market
 BRAND EQUITY
• Value added to the same product under a
particular brand
• This makes one product preferable over the
other
• Brand superior or inferior to that of others

Example: Apple
Simple definition of CBBE
 Knowledge about the brand
 There is a favorable consumers reaction in
favor of the brand..
CUSTOMER-BASED BRAND
EQUITY (CBBE)
“It shows how a brand became
successful because of the
knowledge of the customers about
the brand and the positive response
they gave to the brand”
Figure 2.1- Marketing Advant-
ages of Strong Brands
Brand Knowledge

 Key to create brand equity

• Creates the differential effect that drives brand
equity
 Marketers need an insightful way to rep-
resent how brand knowledge exists in
consumer memory
Associative Network Memory
Model
 Views memory as a network of nodes and
connecting links
• Nodes - Represent stored information or con-
cepts
• Links - Represent the strength of association
between the nodes
 Brand associations are informational
nodes linked to the brand node in
memory
Figure2.2 - Possible Apple Computer As-
sociations
 Example
 Go to google classroom
 Open the google doc
Sources of Brand Equity
 Brand Awareness
 Brand Image
Brand Awareness
 Brand recognition – confirm prior
expsoure (show online examples)

 Brand recall – ability to retrieve the brand

from memory (show online examples)
Advantages of Brand Awareness

 Learning advantages
- learn, mind,
 Consideration advantages

- substitute, alternative, option

 Choice advantages

- making decision
a. Consumer purchase motivation
b. Consumer purchase ability
Brand Image
 Familiarity of the brand through repeated
exposure
 Impression
Brand Image
1. Strength of Brand Associations
- person thinks about product
information
2. Favorability of Brand Associations
- possesses relevant attributes that
satisfy consumer needs and wants
3. Uniqueness of Brand Associations
- Unique selling proposition
Identifying and Establishing
Brand Positioning
 Basic Concepts
 Target Market
 Nature of Competition
 Points-of-Parity and Points-of-Difference
 Basic Concepts
 Brand positioning
• Act of designing the company’s of-
fer and image so that it occupies a
distinct and valued place in the tar-
get customers’ minds
• Finding the proper “location” in the
minds of consumers or market
segment
 Target Market
 Market segmentation-Divides the market into
distinct groups of consumers who have similar
needs and consumer behavior
 Involves identifying segmentation bases and
criteria
• Criteria
• Identifiability - identify
• Size – sales potential
• Accessibility - available
• Responsiveness – respond to marketing program
Figure 2.3 - Consumer Segmentation Bases
Figure 2.4 - Business-to-Business
Segmentation Bases
Nature of Competition
- resources
-Capabilities
-Intentions
Points-of-Parity and Points-of-
Difference
Points-of-difference associations
- benefits associate with a brand
- Example: why do you like “snickers”
Points-of-parity associations
- may be shared with other brands
- Example: coach bag – Michael kors
Points-of-parity versus points-of-difference
- that the brand is good enough
 Example:
 COCA COLA & PEPSI COLA

• the point of parity is that they are two very

famous fresh soft drinks.
• the point of difference is the image that they
reflect :
• Pepsi is trendier and cooler with an image of
young people and celebrities' while
• coca cola is an emotional brand. This is due to
the advertising campaigns they both spread
 Positioning Guidelines
 Defining and Communicating the
Competitive Frame of Reference
 Choosing Points-of-Difference

 Establishing Points-of-Parity and

Points-of-Difference
 Straddle Positions

 Updating Position Overtime

 Developing a Good Positioning

 Activity
 Students to write their own interpretation
 Brand Mantra
 Designing a Brand Mantra
 Implementing a Brand Mantra
Brand Mantra
 Is a short, 3-5-word phrase that captures
the essence or spirit of the brand
 encapsulates the frame of reference, the
points of difference, the points of parity, and
everything else about your brand into one
thought
• Brand essence
• Core brand promise
• Purpose

Example: Apple – “Think different”

Designing A GOOD MANTRA
1. Brand Function - describes the service,
type or benefit
2. Descriptive Modifier - is the answer to
'not just any kind' of function
3. Emotional Modifier - how the brand
provides the benefit
 Example: Nike
Brand Descriptive Emotional
Function modifier modifier
performance athletic authentic
 Writing activity
Implementing a Brand Mantra
A good brand mantra should:

1. Communicate
- clarify what is unique about the brand
2. Simplify
- memorable, short, crisp & vivid
3. Inspire
- meaningful & relevant
 Writing activity
 Write your brand mantra