Customer based Brand equity

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					Customer based Brand
equity
         Brand Equity
Brand equity relates to the fact that different
outcomes result in the marketing of a product
or service because of its brand name, as
compared to if the same product or service
did not have that name.
 Brand Equity  the added values endowed
to product or service
Customer based Brand
      Equity
Customer based band equity: is the
differential effect that brand knowledge has
on consumer response to the marketing of
that brand.
    Concept of Customer based
          Brand Equity

Customer-based brand equity
  Differential effect
  Customer brand knowledge

  Customer response to brand marketing

A brand has positive customer based brand
equity when consumers react more favorably
to a product and the way it is marketed when
the brand is identified than not.
  Concept of Customer based
        Brand Equity
Customers will be more accepting of a new
brand extension for a brand with positive
customer based brand equity.
Less sensitive to price increases
And withdrawal of advertising effort
And more willing to seek the brand in a new
distribution channel.
  Concept of Customer based
        Brand Equity
A brand has negative customer based brand
equity if consumers react less favorably to
marketing activity for the brand compared
with an unnamed or fictitiously named version
of the product.
  Concept of Customer based
        Brand Equity
Differential effect : brand equity arises out of
differences in consumer responses.
The difference in response are a result of
consumer’s knowledge about the brand, what
they have learned, felt, seen and heard about
the brand .
Brand equity ultimately depends on what
resides on the minds of the consumers.
  Concept of Customer based
        Brand Equity
         Customer’s differential responses
           which makes brand equity are
           reflected on :
Perceptions
Preferences and behaviour related to all
aspects of brand marketing.
Customer based brand
    equity model

           Consumer-             INTENSE, ACTIVE
                                    LOYALTY
           Brand
           Resonance


                                   RATIONAL &
    Consumer      Consumer         EMOTIONAL
    Judgments     Feelings         REACTIONS



                                   POINTS-OF-
                                    PARITY &
 Brand                 Brand       POINTS-OF-
 Performance           Imagery     DIFFERENCE



                                   DEEP, BROAD
          Brand Salience             BRAND
                                   AWARENESS
    Brand equity as a bridge

Brand as a reflection of the past: Quality
of investment in brand building is the
most critical factor, not the quantity.
Brand as a direction for the future.
Making a brand strong: Brand
        knowledge

Brand knowledge is the key to creating
brand equity, because it creates the
differential effect that drives brand
equity.
Brand knowledge consists of a brand
node in memory with a variety of
associations linked to it. (Associated
network memory model)
 Making a brand strong: Brand
         knowledge
Brand knowledge structures depend on . . .
   The initial choices for the brand elements
   The supporting marketing program and the
    manner by which the brand is integrated
    into it
   Other associations indirectly transferred to
    the brand by linking it to some other
    entities
 Brand knowledge – making a
        brand strong
Brand knowledge consists of 2 components
Brand awareness and Brand image

Brand awareness : strength of the brand
node or trace in memory which can be
measured as the consumer’s ability to identify
the brand under different conditions.
   Brand knowledge – making a
          brand strong
Brand image : is consumer’s perceptions about
  a brand as reflected by the brand
  associations held in consumer memory.
Brand associations for Apple computers “ User
  friendly, macintosh,Creative,
Eg : Mc Donald’s- Quality, service, cleanliness
  and value, convenience, Ronald Mc
  Donald,for kids
      Sources of brand equity

  Customer based brand equity occurs when
  the consumer has a high level of awareness
  and familiarity with the brand and holds some
  strong, favorable and unique associations in
  memory.
Brand awareness consists of
  Brand recognition
  Brand recall
    Sources of brand equity

Brand recognition :is consumer’s ability to
confirm prior exposure to the brand when
given the brand as a cue.
Brand recall:is the consumer’s ability to
retrieve the brand from memory when given
the product category, the needs fulfilled by
the product category or a purchase or usage
situation as a cue.
    Sources of brand equity

If consumer decisions are made at the point
of purchase, then brand recognition is more
important.
If consumer decisions are mostly based on
settings away from the point of purchase,
then brand recall is more important. Eg :
Services, Online brands.
Consumers must actively seek the brand ad
retrieve it from memory when appropriate.
    Sources of brand equity

Brand evaluations and choices depend on the
brand recall.
Advantages of brand awareness

 Learning advantages: Brand awareness
 helps in the formation and strength of the
 associations that make up the brand image.
 Consideration advantages
Raising brand awareness increases the
 likelihood that the brand will be a member of
 the consideration set.
 Choice advantages
Establishing Brand awareness

Creating brand awareness means increasing
the familiarity of the brand through repeated
exposure.
Repetition increases reconcilability, by
improving brand recall.
Creating a positive brand image takes
marketing programs that link strong,
favorable,and unique associations to the
brand in memory.
  Establishing Brand awareness

  Advertising, promotion , sponsorship , event
  marketing, publicity and public relations and
  outdoor advertising – can increase familiarity
  and awareness of that brand element.
  Repetition increases brand recognizabilty.
  Brand recall requires linkages in memory to
  appropriate product categories.
Jingle, logos, characers, packaging aid recall.
Strength of brand associations

Depents on
Brand attributes : are those descriptive
features that characterizes a product or
service.
Brand benefits : are the personal value and
meaning that consumers attach to the
product or service.
    Building a strong brand

Who are you? ( brand identity)
What are you ? ( Brand meaning)
What do I think or feel about
you?(Brand response)
What kind of an association or how
much of connection would I like to have
with you?(Brand relationships)
Customer based brand
    equity model

           Consumer-             INTENSE, ACTIVE
                                    LOYALTY
           Brand
           Resonance


                                   RATIONAL &
    Consumer      Consumer         EMOTIONAL
    Judgments     Feelings         REACTIONS



                                   POINTS-OF-
                                    PARITY &
 Brand                 Brand       POINTS-OF-
 Performance           Imagery     DIFFERENCE



                                   DEEP, BROAD
          Brand Salience             BRAND
                                   AWARENESS
    Building a strong brand

Convert brand response to create an intense,
active loyalty relationship between customer
and the brand.(brand relationships)
      Brand building blocks

Brand salience : measures awareness of the
brand ie how often and how easily the brand
is evoked under various situations or
circumstances.
Breadth and depth of awareness
Depth of brand awareness : measures how
likely it is for a brand elements come to mind
and the ease with which it does so.
      Brand building blocks

Breadth of awareness : measures the range
of purchase and usage situations in which the
brand elements comes to mind and depends
on the organization of the brand and product
knowledge category.
Beverage
Category Hierarchy           Beverage



                     Water                   Others


       .
                             Non-Alcoholic            Alcoholic


                                   Juices                 Wine

                                    Milk                  Beer

                               Hot beverage              Distilled
                                                          Spirits
                                 Soft drinks
                                                            ?
                                     ?
    Product category
        structure
The product hierarchy shows that not
only the depth of awareness matters but
also the breadth.
A highly salient brand is one that has
both depth and breadth of brand
awareness
         Resonance             4 relationship



   Judgments     Feelings      3. response




Performance          Imagery
                                2.Meaning



          Salience
                                 1.Identity
Building a Brand equity-4 steps

Brand salience : measures awareness of the
brand ie how often and how easily the brand
is evoked under various situations or
circumstances.
Breadth and depth of awareness
Depth of brand awareness : measures how
likely it is for a brand elements come to mind
and the ease with which it does so.
      Brand building blocks

Breadth of awareness : measures the range
of purchase and usage situations in which the
brand elements comes to mind and depends
on the organization of the brand and product
knowledge category.
         Product category -
            Beverages
                             Beverage
Beverage
Category Hierarchy

                     Water                   Others




                             Non-Alcoholic            Alcoholic


                                   Juices                 Wine

                                    Milk                  Beer

                               Hot beverage              Distilled
                                                          Spirits
                                 Soft drinks
                                                            ?
                                     ?
Strategic implications
The product hierarchy shows that not only the
depth of awareness matters but also the
breadth .
A brand must not only be top of the mind but
it must be available at the right times and
places.
Breadth is often neglected even for brands
which are category leaders. Eg : campbell’s
soup
Strategic implications
A highly salient brand is one that has both
depth and breadth of brand awareness.
     Brand performance
  Describes how well the product or service
  meets customer’s functional needs.
Attributes which underlie brand performance
  Primary ingredients and features
  Product reliability, durability and serviceability
  Style and design
  Price
   Brand performance
Reliability : consistency of performance over
time and from purchase to purchase.
Durability: is the expected economic life of the
product
Serviceability:The ease of repairing the
product if needed.
  Brand performance -
        Service
Customers have performance related associations
with service.
Service effectiveness : measures how well the
brand satisfies customer’s service requirements.
Service efficiency: describes the speed and
responsiveness of service.
Service empathy: The extent to which service
providers are seen as trusting , caring .
       Brand Imagery
Depends on extrinsic properties of the
product or service and the ways in which the
brand attempts to meet customer’s
psychological or social needs.
It is the way people think about a brand
abstractly
Imagery refers to the more intangible aspects
of the brand.
Intangibles linked to a
        brand
User profiles
Purchase and usage situations
Personality and values
History, heritage and experiences
Nivea skin cream : family/shared
experiences/maternal/multipurpose,classic/ti
meless and childhood memories
  Intangibles linked to a
          brand
Demographic factors
 Gender: Marlboro cigarettes
 Age : Pepsi cola Fuji films are considered
 younger than Coke, Kodak film
 Race
 Income :BMW, -Young affluent urban
 professionals.
Intangibles linked to a
        brand
Psychographic factors :attitudes towards
life,careers, social issues
       Brand judgments
  They are customer’s personal opinions about
  and evaluations of the brand which
  consumers form by putting together all the
  different brand performance and imagery.
Judgments about quality – Brand quality
Brand credibility
Brand consideration
Brand superiority
       Brand judgments
  Brand quality :
  Brand credibility : describes the extent to
  which customer’s see the brand credible in
  terms of
Perceived expertise
Trustworthiness
Likability
     Brand judgments
Brand expertise : competent, innovative and
a market leader.
Band trustworthiness: dependable and
keeping customer’s interests in mind.
Brand Likabilty: fun, interesting and worth
spending time with.
         Brand judgments
    Brand consideration: depends on how
    personally relevant customers find the brand
    and is a crucial filter in terms of brand equity.
.
    Brand superiority : The extent to which
    customers view the brand as unique and
    better than other brands.
       Brand feelings
The customer’s emotional responses and
reactions to the brand
Warmth: Hall mark cards
Fun: Disney
Excitement:MTV
Security:insurance
Social approval:Mercedes
Self respect:
       Brand Resonance
  Describes the nature of relationships and the
  extent to which customers feel that they are
  “Insync” with the brand.
Eg : Harley Davidson
Resonance is characterized in terms of
  intensity or the depth of the psychological
  bond that customer’s have with the brand.
       Brand Resonance
Can be classified into 4 categories
Behaviour loyalty
Attitudinal attachment
Sense of community
Active engagement
       Brand Resonance
Behaviour loyalty : in terms of repeat purchases
  and the amount or share of category volume
  attributed to the brand.
Sense of community : identification with a brand
  community through which customers feel an
  affiliation with other people associated with
  the brand.
      Brand Resonance
Apple
Harley Davidson
Jeep
     Apple computers
Apple encourages owners of its computers to
form local Apple user groups.
By 2005, there were over 700 groups
User groups provide Apple owners with
opportunities to learn more about their
computers , share ideas
      Harley Davidson
Sponsors the Harley owners Group (HOG).
In 2005, it has 900,000 members all over the
world.
Mission – “To ride and have fun”
First time buyer gets a free membership of
one year.
Membership gives previlege to a magazine
Hog Tales, a touring handbook, emergency
road service .
    Harley Davidson
Company also maintains an extensive
website devoted to HOG
Includes information about club
chapters and events and features a
special members only section.
        Brand Positioning

The act of designing the company’s offer and
image so that it occupies a distinct and
valued place in the target customer’s mind.

Its all about identifying the optimal location of
a brand and its competitors in the minds of
consumers to maximize potential benefit to
the firm.
                  Cond….


It helps to guide marketing stategy by
clarifying what a brand is all about.
How it is unique and how it is distinct from
competitive brands.
           Eg : Pepsi One

Pepsi originally positioned Pepsi One as a
fully flavoured yet healthy alternative.
It was an alternative to regular colas and
targeted 20 –30 year old men who did not like
the taste of diet colas.
The first slogan was “Tue cola taste one
calorie”
1999 – replaced it with “Tasted more like
regular colas”
After 18 months , Pepsi achieved a 0.8%
share.
Company cited poor positioning as the
reason for its lack of success.
Customers didn’t understand how Pepsi one
is different from other diet colas.
2000: “Too good to be one calorie .. But it is”.
   Frame of reference
Positioning requires a frame of reference
Who the target customer is
Who the main competitors are
How the brand is similar to its competitors
How the brand is dissimilar to competitors.
       Target market
Different customers may have different brand
knowledge structures and thus different
perceptions and preferences.
It enables the marketers to understand which
brand associations should be strongly held,
favorable and unique.
  Segmentation bases
Behavioral – User status, Usage rate, usage
occasion,Brand benefits sought.
Demographic : Income, age,sex, race, family.
Psychogaphic: Values, opinions, attitudes,
lifestyle.
Geographic : International, regional
Nature of good:
Buying condition :purchase location, who
buys.
Behavioral segmentation – Tooth
             paste
Sensory segment: seeking flavour and
product appearance.
Sociables: seeking brightness of teeth.
Worriers: seeking decay prevention
Independent segment : seeking low price.
Nature of competition
Competitive analysis considers resources,
capabilities, and intentions of various other
firms which helps marketers to choose
markets where consumers can be profitably
served.
Competition should not be narrowly
defined.eg : Noncola flavoured soft drinks
Point of difference(POD)
POD are strong, favorable and unique brand
associations for a brand.
POD’s are attributes or benefits that
consumers strongly associate with a brand.
Positively evaluate and believe that they
could not find the same extent with a
competitive brand.
         Points of Parity
  Those associations that are not necessarily
  unique to the brand but may infact be shared
  with other brands.
2 types
Category type associations
Competitive type associations.
    Category points of parity

Are those associations that consumers view
as being necessary to be a legitimate and
credible offering within a certain product or
service category.
Eg : Nivea became a leader in the skin cream
category by creating strong points of
difference on the benefits of
“gentle”,”protective” and “caring”.
 They launched brand extensions into
deodorants, shampoos and cosmetics.
Nivea found it necessary to establish
category points of parity before they
promote their brand’s point of
difference.
Competitive      points of parity
 Are those associations designed to negate
 competitor’s points of difference.
 If a brand can “break even” in those areas
 where its competitors are trying to find an
 advantage , the brand should be in strong,
 unbeatable competitive position.
 Eg : Miller Lite – Philip Morris

				
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posted:2/13/2012
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