9Creating Brand

Equity

1

A Brand-new World

9-3

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?

9-4

Brand

A name, term, sign, symbolor design, or a combination of them, intended to identify the goodsor services of one seller or groupof sellers and to differentiatethem from those of competitors.

Building and

Sustaining Brand Equity © Ike Janita Dewi

Financial Values of Strong Brands

Akuisisi Rowntree oleh Nestle (Juni 1988; The New York Times, 24 Juni 1988)

Akuisisi Kraft oleh Philip Morris (Oktober 1988; Coll, 1988)

Philip Morris dan Nestle bersedia membayar lebih dari 6 kali lipat dan 5 kali lipat dari nilai buku perusahaan (book value) dari masing-masing perusahaan yang dibelinya karena brand Kraft dan Rowntree dianggap mempunyai nilai ekonomis yang sangat besar.

The World’s Most Valuable Brands (2008)

No Name of Brands Valuation Country of Origin

1. COCA-COLA 65,324 U.S

2. MICROSOFT 58,709 U.S

3. IBM 57,091 U.S

4. GE 51,569 U.S

5. NOKIA 33,696 Finland

6. TOYOTA 32,070 Japan

7. INTEL 30,954 U.S

8. McDONALD’S 29,398 U.S

9. DISNEY 29,210 U.S

10. MERCEDES-BENZ 23,568 Germany

Chapter 127

Figure 9.7 Interbrand Brand Valuation Method

Asian Brands The brutal truth is that branding is

misunderstood by decision-makers in Asia (excluding Japan)

There exists widespread misconceptions and, in many cases, a certain degree of ignorance over the value and role of brands as well as the process required to build them.

Surveys confirm that Asians from across the region prefer Western brands to homegrown ones.

The continued absence of genuinely great Asian brands will slow the Asian prospect.

A Brand is not made in the factory but in the mind of the consumers

9-11

Attributes of Strong Brands Excels at delivering

desired benefits Stays relevant Priced to meet

perceptions of value Positioned properly Communicates

consistent brand messages

Well-designed brand hierarchy

Uses multiple marketing activities

Understands consumer-brand relationship

Supported by organization

Monitors sources of brand equity

9-12

The Role of Brands

Identify the maker Simplify product

handling Organize accounting Offer legal protection

Signify quality Create barriers to

entry Serve as a

competitive advantage

Secure price premium

9-13

Branding

Endowing products and serviceswith the power of a brand.

9-14

Brand Equity

The differential effect that brandknowledge has on consumer

response to the marketing of that brand.

9-15

Brand Associations

Strong Unique Favorable

9-16

Marketing Advantages of Strong Brands Improved perceptions of

product performance Greater loyalty Less vulnerable to

competition Less vulnerable to

crises Larger margins Inelastic consumer

response to price increases

Elastic consumer response to price decreases

Greater trade cooperation

Increase in effectiveness of IMC

Licensing opportunities Brand extension

opportunities

9-17

Brand Promise

The marketer’s vision of what

the brand must be and do for

Consumers.

9-18

Brand Equity Models

Brand Asset Valuator Aaker Model

BRANDZ Brand Resonance

9-19

Brand Resonance Pyramid (Keller, 2002)

9-20

Rational & Emotional Routes to Brand Building

9-21

Drivers of Brand Equity Brand

elements Marketing

activities Meaning

transference

9-22

Brand Element Choice Criteria

Memorable Meaningful Likeability

Transferable Adaptable Protectible

9-23

Brand Elements

Brand names Slogans Characters

URLs Logos Symbols

9-24

9-25

Slogans

Like a good neighbor, State Farm is there

Just do it Nothing runs like a

Deere Help is just around the

corner Save 15% or more in 15

minutes or less

We try harder We’ll pick you up Nextel – Done Zoom Zoom I’m lovin’ it Innovation at work This Bud’s for you Always low prices

9-26

Innovative slogan

9-27

Strong slogan to support a brand

9-28

Designing Holistic Marketing Activities

Brands are not built by advertising alone.

Brand building marketing programs: Personalization Integration Internalization

The Importance of After-Sales Support in Consumer Decision Journey

Welcome to Apple Genius Bar. The Genius Bar is a tech support station located inside every Apple Retail Store, the purpose of which is to offer help and support for Apple products. Ron Johnson, the Senior Vice President for Retail, has often referred to the Genius Bar as the "heart and soul of our stores". Employees are specially trained and certified at the Genius Bar. Their role is to help customers with Apple hardware and software. All in-store repairs of Apple products are carried out by "Geniuses", formerly known as Mac Geniuses.

Managing Brand Experience: Nike+ Experience

9-31

Measuring Brand Equity

Brand audits Brand tracking Brand valuation

9-32

Interbrand’s Brand Equity Formula

Brand earnings Brand sales Costs of sales Marketing costs Overhead expenses Remuneration of capital

charge Taxation

Brand strength Leadership (25%) Stability (15%) Market (10%) Geographic spread

(25%) Trend (10%) Support (10%) Protection (5%)

9-33

Managing Brand Equity

Brand reinforcement Brand revitalization Brand crises

9-34

Devising a Branding Strategy

Develop new brand elements Apply existing brand elements Use a combination of

old and new

9-35

Branding Terms

Brand line Brand mix Brand extension Sub-brand Parent brand Family brand

Line extension Category extension Branded variants Licensed product Brand dilution Brand portfolio

9-36

Brand Extensions

Advantages

- New-Product Success

- Positive Feedback Effects Disadvantages

- Brand Dilution

- Cannibalization

9-37

Brand Naming

Individual names Blanket family names Separate family names Corporate name/individual name combo

9-38

Brand Roles in a Brand Portfolio Flankers Cash cows Low-end entry-level High-end prestige

Building and

Sustaining Brand Equity © Ike Janita Dewi

Everything can be branded!

Building a Strong Service Brand: Lessons from Mayo Clinic

Mayo Clinic has developed one of the most powerful service brands in the world.

Three branding lessons:

1. attend to organizational values.

2. play defense, not just offence

3. turn customers into marketers

Berry and Seltman (2007), Building a Strong Service Brand: Lessons from Mayo Clinic, Kelley School of Business, www. elsevier.com/locate/bushor

A Service Branding Model

Organization’s Presented Brand

External Brand Communications

Customer Experience with Organization

Brand Meaning

Brand Awareness

Brand Equity

Berry and Seltman (2007), Building a Strong Service Brand: Lessons from Mayo Clinic, Kelley School of Business, www. elsevier.com/locate/bushor

Service Branding Model vs Goods Branding Model

Customers’ actual experiences are salient in both models.

But, for labor-intensive services those experiences are primarily with people rather than manufactured goods.

In services, it is the organization that’s typically branded (because the experience comes from the organization).

For physical goods, the product is the brand.