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Brand Management
Week 02
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The Brand Equity Concept
No common viewpoint on how it should beconceptualized and measured
It stresses the importance of brand role inmarketing strategies.
Brand equity is defined in terms of themarketing effects uniquely attributable to thebrand.
Brand equity relates to the fact that different outcomes
result in the marketing of a product or service because of itsbrand name, as compared to if the same product or service
did not have that name.
1.2
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Strategic Brand Management It involves the design and implementation of marketing
programs and activities to build, measure, and managebrand equity.
The Strategic Brand Management Process is defined asinvolving four main steps:
1. Identifying and establishing brand positioning and values
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance
4. Growing and sustaining brand equity
1.3
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1.4
Strategic Brand Management Process
Mental maps
Competitive frame of reference
Points-of-parity and points-of-difference
Core brand values
Brand mantra
Mixing and matching of brand elements
Integrating brand marketing activities
Leveraging of secondary associations
Brand value chain
Brand audits
Brand tracking
Brand equity management system
Brand-product matrix
Brand portfolios and hierarchies
Brand expansion strategies
Brand reinforcement and revitalization
Key ConceptsSteps
Grow and sustain
brand equity
Identify and establish
brand positioning and values
Plan and implement
brand marketing programs
Measure and interpretbrand performance
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Stage 1: Identifying and establishing brand positioningand values
Brand positioning Chapter 3
Core Brand Values set of abstract associations (benefitsand attributes) that characterize a brand.
Brand Mantra short three-to-five word expression of themost important aspects of the brand and its core brandvalues.
Brand Audit comprehensive examination of the brand,involving activities to assess the health of the brand,uncover its sources of equity, and suggest ways to improveand leverage the equity.
Stage 2 Planning and Implementing Brand Marketing
Programs Customer Based Brand Equity Chapter 2
Choosing the brand elements logos, symbols, signs etc.
Figure 1.14 on page 46 (2nd Edition)NEXT SLIDE
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CONSUMER KNOWLEDGE EFFECTS
Brand Awareness
Depth
Recall
Recognition
Breadth
Purchase
Consumption
Brand Associations Strong
Relevance
Consistency
Favorable Desirable
Deliverable
Unique
Points of Parity
Points of Difference
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2.9
CHAPTER 2:CUSTOMER-BASED BRAND EQUITY
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2.10
Customer-Based Brand Equity
The differential effect that brand knowledge
has on consumer response to the marketing of
that brand.
Keller, 1993
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2.11
Customer-Based Brand Equity
Differential effect Differences in consumer response
Brand knowledge
A result of consumers knowledge about thebrand
Consumer response to marketing Choice of a brand
Recall of copy points from an ad Response to a sales promotion
Evaluations of a proposed brand extension
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2.12
Brand Equity as a Bridge
Reflection ofpastinvestments in the marketing
of a brand
Direction forfuture marketing actions or
programs
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2.13
Making a Brand Strong:
Brand Knowledge
Brand knowledge is the key to creating brand
equity.
Brand knowledge consists of a brand node in
memory with a variety of associations linked
to it.
Brand knowledge has two components: brand
awareness and brand image.
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2.14
Sources of Brand Equity
Brand awareness
Brand recognition
Brand recall
Brand image
Strong, favorable, and unique brand associations
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2.15
Brand Awareness Advantages
Learning advantages
Register the brand in the minds of consumers
Consideration advantages
Likelihood that the brand will be a member of the
consideration set
Choice advantages
Affect choices among brands in the consideration
set
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2.16
Establishing Brand Awareness
Increasing the familiarity of the brand through
repeated exposure (for brand recognition)
Forging strong associations with the
appropriate product category or other
relevant purchase or consumption cues (for
brand recall)
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2.17
Creating a Positive Brand Image
Brand Associations
Does not matter which source of brand
association
Need to be favorable, strong, and unique
Marketers should recognize the influence of these
other sources of information by both managing
them as well as possible and by adequatelyaccounting forthem in designing communication
strategies.
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2.18
The Four Steps of Brand Building
1. Ensure identification of the brand with customersand an association of the brand in customers minds
2. Establish the totality of brand meaning in the minds
of consumers3. Elicit the proper customer responses to the brand
identification and brand meaning
4. Convert brand response to create an intense, active
loyalty relationship between customers and the
brand
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2.19
Four Questions Customers ask of Brands
1. Who are you? (brand identity)
2. What are you? (brand meaning)
3. What about you? What do I think or feelabout you? (brand responses)
4. What about you and me? What kind of
association and how much of a connection
would I like to have with you? (brand
relationships)
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2.20
Customer-Based Brand Equity Pyramid
RESONANCE
SALIENCE
JUDGMENTS FEELINGS
PERFORMANCE IMAGERY
4. RELATIONSHIPS =
What about you and me?
3. RESPONSE =
What about you?
2. MEANING =
What are you?
1. IDENTITY =
Who are you?
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Sub-Dimensions of CBBE Pyramid
LOYALTY
ATTACHMENT
COMMUNITY
ENGAGEMENT
QUALITYCREDIBILITY
CONSIDERATION
SUPERIORITY
WARMTH
FUN
EXCITEMENT
SECURITY
SOCIAL APPROVAL
SELF-RESPECT
CATEGORY IDENTIFICATION
NEEDS SATISFIED
PRIMARY CHARACTERISTICS &
SECONDARY FEATURES
PRODUCT RELIABILITY,
DURABILITY & SERVICEABILITY
SERVICE EFFECTIVENESS,
EFFICIENCY & EMPATHY
STYLE AND DESIGN
PRICE
USER PROFILES
PURCHASE & USAGE
SITUATIONSPERSONALITY &
VALUES
HISTORY, HERITAGE
& EXPERIENCES
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2.22
Salience Dimensions
Depth of brand awareness
Ease of recognition and recall
Strength and clarity of category membership
Breadth of brand awareness
Purchase consideration
Consumption consideration
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2.23
Depth and Breadth Importance
The product category hierarchy shows us not
only the depth of awareness matters but also
the breadth.
The brand must not only be top-of-mindand
have sufficient mind share, but it must also
do so at the right times and places.
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2.24
Product Category Structure
To fully understand brand recall, we need to
appreciateproduct category structure, or how
product categories are organized in memory.
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2.25
Performance Dimensions Primary characteristics and supplementary
features
Product reliability, durability, and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price
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2.26
Imagery Dimensions
User profiles
Demographic and psychographic characteristics
Actual or aspirational
Group perceptionspopularity
Purchase and usage situations
Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc.), location, and context of usage
Personality and values
Sincerity, excitement, competence, sophistication, and ruggedness
History, heritage, and experiences
Nostalgia
Memories
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2.27
Judgment Dimensions
Brand quality
Value
Satisfaction
Brand credibility Expertise
Trustworthiness
Likeability
Brand consideration
Relevance
Brand superiority
Differentiation
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2.28
Feelings Dimensions
Warmth
Fun
Excitement
Security
Social Approval
Self-respect
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2.29
Resonance Dimensions Behavioral loyalty
Frequency and amount of repeat purchases
Attitudinal attachment Love brand (favorite possessions; a little pleasure)
Proud of brand
Sense of community Kinship
Affiliation
Active engagement Seek information
Join club
Visit website, chat rooms
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Customer-Based Brand Equity Model
Consumer-
Brand
Resonance
Brand Salience
Consumer
Judgments
Consumer
Feelings
Brand
PerformanceBrand
Imagery
INTENSE, ACTIVE
LOYALTY
RATIONAL &
EMOTIONAL
REACTIONS
POINTS-OF-
PARITY &POINTS-OF-
DIFFERENCE
DEEP, BROAD
BRAND
AWARENESS
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2.31
Brand Building Implications
Customers own brands.
Dont take shortcuts with brands.
Brands should have a duality.
Brands should have richness.
Brand resonance provides important focus.
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2.32
Creating Customer Value
Customer-brand relationships are the
foundation of brand resonance and building
a strong brand.
The customer-based brand equity model
certainly puts that notion front and center.
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2.33
Is a company consumer-centric?
1. Is the company looking for ways to take care of
you?
2. Does the company know its customers well
enough to differentiate between them?3. Is someone accountable for customers?
4. Is the company managed for shareholder value?
5. Is the company testing new customer offers andlearning from the results?
Sources: Larry Selden and Geoffrey Colvin, 2004.
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2.34
Customer Relationship Management (CRM)
Uses a companys data systems and
applications to track consumer activity and
manage customer interactions with the
company
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2.35
Customer Equity
Blattberg and Deighton (1996) offer eight guidelines as ameans of maximizing customer equity:
Invest in highest-value customers first
Transform product management into customer management
Consider how add-on sales and cross-selling can increase customerequity
Look for ways to reduce acquisition costs
Track customer equity gains and losses against marketing programs
Relate branding to customer equity Monitor the intrinsic retainability of your customer
Consider writing separate marketing plansor even building twomarketing organizationsfor acquisition and retention efforts
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2.36
Customer Equity
The sum of lifetime values of all customers Customer lifetime value (CLV) is affected by
revenue and by the cost of customer
acquisition, retention, and cross-selling Consists of three components:
Value equity
Brand equity
Relationship equity
Rust, Zeithamal & Lemon, 2004
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Relationship of Customer Equity to Brand
Equity
Customers drive the success of brands butbrands are the necessary touchpoint thatfirms have to connect with their customers.
Customer-based brand equity maintains thatbrands create value by eliciting differentialcustomer response to marketing activities.
The higher price premiums and increasedlevels of loyalty engendered by brandsgenerate incremental cash flows.