Marketing Management, 14th Edition

Kotler Philip, Keller Kevin Lane

Creating Brand Equity

Course Instructor
Mihai Țichindelean
 CHAPTER QUESTIONS

 What is a brand, and how does it work?

 What is brand equity?

 How is brand equity built, measured, and managed?

 WHAT IS A BRAND, AND HOW DOES IT WORK?

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”

Difference may be rationale, functional, tangible, related to the product

performance of the brand

or

Symbolic, emotional, or intangible – related to what the brand represents or

means in a more abstract sense
WHAT IS A BRAND, AND HOW DOES IT WORK?
 THE ROLE OF BRANDS

- Identify the source of a product and allow consumers to

assign responsibility for its performance to a particular
company
 THE ROLE OF BRANDS

- Signals a certain level of quality

http://interbrandonline.com/bestswissbrands/
 THE ROLE OF BRANDS

- Simplify product handling and tracing

- Organize inventory and accounting records

- Legal protection for unique features or aspects of the product

(brand name – registered trademarks, production process –
patents, packaging – copyrights and proprietary designs)

- Create barriers to entry

- Serve as a competitive advantage
- Secure price premium
 THE SCOPE OF BRANDING

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

=> Marketers need to know who the product is (name and other
identification elements), what the product does and why consumers
should care

=> Branding creates mental structures that help consumers organize

their knowledge about products/services in a way that clarify their
decision making process => value to the firm
 WHAT IS BRAND EQUITY?

Brand Equity is the added value endowed on products and

services.

It may be reflected in the way consumers think, feel, and

act with respect to the brand, as well as in prices, market
share, and profitability the brand commands.

Brand equity is studied through various approaches =>

customer based approach (power of a brand lies in what
customer have seen, read, heard, learned, thought, and felt
about the brand over time) => effect that brand related
marketing has on the customer’s brand knowledge
 MARKETING ADVANTAGES OF STRONG BRANDS

- Improved perception of product performance

- Greater loyalty (attitudinal loyalty)
- Less vulnerability to competitive marketing actions
- Larger margins
- More inelastic consumer response to price increases
- More elastic consumer response to price decreases
- Increased marketing communications effectiveness
 MARKETING ADVANTAGES OF STRONG BRANDS

- Possible licensing opportunities

- Additional brand extension opportunities

- Improved employee recruiting and retention

- Greater financial market return

 BRAND EQUITY MODELS

 BRANDASSET Valuator (Young & Rubicam)

- Research on 800.000 consumers in 51 countries

- Four pillars: energized differentiation (a brand is seen
different from others), relevance (brand’s appeal),
Esteem (quality and loyalty perceptions), Knowledge
(awareness)
 BRAND EQUITY MODELS

 BRANDZ (Millward Brown and WPP)

- For any one brand, each person interviewed is assigned

to one level of the pyramid depending on their responses
to a set of questions

- The BrandDynamics Pyramid shows the number of

consumers who have reached each level
BRAND EQUITY MODELS – BRANDDYNAMICS PYRAMID

Strong Relationship

Bonding

Advantage

Performance

Relevance

Presence
Weak Relationship
 BUILDING BRAND EQUITY

1. The initial choices for the brand elements or identities

making up the brand (brand names, logos, symbols,
characters, spokespeople, slogans, jingles, packages,
and signage)

http://
www.orange.ro/newsroom/index.php?option=com_content
&view=article&id=66&Itemid=54
 BUILDING BRAND EQUITY

2. The product and service and all accompanying marketing activities

and supporting marketing programs

http://
www.youtube.com/watch?v=LAgmeowWK3c&list=PL2p6GCSwo4K
NHFsiUDCc1WJrF1Y9huWWM&src_vid=EBbtSi_PCCs&feature=iv
&annotation_id=annotation_1147142245

https://www.orange.ro/myaccount/
 BUILDING BRAND EQUITY

3. Other associations indirectly transferred to the brand by linking it to

some other entity (person, place, thing)
 CHOOSING BRAND ELEMENTS

- Memorable
- Meaningful BRAND BUILDERS
- Likeable

- Transferable
- Adaptable BRAND PROTECTERS
- Protectable
 MEASURING BRAND EQUITY

- Indirect approach – tracking consumer brand knowledge structures

- Direct approach - impact of consumer’s brand knowledge on his

responses to different marketing activities

- Combined approach: The Brand Value Chain (Keller, Lehmann)

Thanks!