What is Brand by MianUsman4


									What is Brand?

An identifying symbol, words, or mark that distinguishes a product or company from its competitors.
Usually brands are registered (trademarked) with a regulatory authority and so cannot be used freely by
other parties. For many products and companies, branding is an essential part of marketing.


Product vs. Brand
Products exist to expand choice.
               Brands exist to simplify choice.

A product occupies functional territory.
             A brand occupies mental and emotional territory.

A product is something made in a factory.
               A brand is something that is bought by a customer.

A product can easily be copied by a competitor.
              A brand is unique.

A product can be quickly outdated.
              A successful brand is timeless.

A product does something.
             A brand stands for something in someone’s mind, in addition to doing something.

A product is defined by it’s heaviest users.
               A brand, by the attraction of what it stands for, defines it’s users.

Products seek out their customers.
              Brands are sought out by their customers.

No products unless people pay.
              No brand unless people believe.

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Mian USMAN                                                                    Mirza Nadeem
03017051059                                                                   03003718143
Level of Product’s

In the 1960's, the economist Philip Kotler changed the perception of marketing. He described what
marketing is rather than what marketers do, thereby changing marketing from a departmental
specialisation into a corporate wide doctrine. For Kotler, marketing was a 'social process by which
individuals and groups obtain what they need and want through creating and exchanging products and
value with others'.

For him, a product is more than physical. A product is anything that can be offered to a market for
attention, acquisition, or use, or something that can satisfy a need or want. Therefore, a product can be a
physical good, a service, a retail store, a person, an organisation, a place or even an idea. Products are the
means to an end wherein the end is the satisfaction of customer needs or wants.

Kotler distinguished three components:
need: a lack of a basic requirement;
want: a specific requirement for products or services to match a need;
demand: a set of wants plus the desire and ability to pay for the exchange.

Customers will choose a product based on their perceived value of it. Satisfaction is the degree to which
the actual use of a product matches the perceived value at the time of the purchase. A customer is satisfied
only if the actual value is the same or exceeds the perceived value. Kotler defined five levels to a product:

1. Core Benefit

the fundamental need or want that consumers satisfy by consuming the product or service.

2. Generic Product

a version of the product containing only those attributes or characteristics absolutely necessary for it to

3. Expected Product
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Mian USMAN                                                                    Mirza Nadeem
03017051059                                                                   03003718143
the set of attributes or characteristics that buyers normally expect and agree to when they purchase a

4. Augmented Product

inclusion of additional features, benefits, attributes or related services that serve to differentiate the
product from its competitors.

5. Potential Product

all the augmentations and transformations a product might undergo in the future.

Kotler noted that much competition takes place at the Augmented Product level rather than at the Core
Benefit level or, as Levitt put it: 'New competition is not between what companies produce in their
factories, but between what they add to their factory output in the form of packaging, services, advertising,
customer advice, financing, delivery arrangements, warehousing, and other things that people value.'

Kotler's model provides a tool to assess how the organisation and their customers view their relationship
and which aspects create value.

Branding challenges and opportunities
Brands build their strength by providing customers consistently superior product and service experiences.
A strong brand is a promise or bond with customers. In return for their loyalty, customers expect the firm
to satisfy their needs better than any other competitors.

Brands will always be important given their fundamental purpose – to identify and differentiate products
and services. Good brand makes people’s lives a little easier and better. People are loyal to brands that
satisfy their expectations and deliver on its brand promise. The predictably good performance of a strong
brand is something that consumer will always value.

The challenges to brands

1) The shift from strategy to tactics: - With the increasing pressure to generate ever-improving
profitability, it is often considered a luxury for managers to develop long-term strategic plans. This is
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
further exacerbated by short-term goal setting, which is frequently designed primarily for the convenience
of the financial community.

2) The shift from advertising to promotions: - As a consequence of the increasing pressure on brand
manager to achieve short-term goals, there is a temptation to cut back on advertising support, since it is
viewed as a long-term brand-building investment, in favour of promotions which generate much quicker
short-term results.

3) On-Line shopping: - The Internet is facilitating on-line shopping. On-line shopping is different from
traditional mail order because:

• Brands are available all the time and from all over the world;

• Information and interactions are in real time;

• Consumers can choose between brands which meet their criteria, as a result of selecting information
which is in a much more convenient format for them, rather than the standard catalogue format.

This poses threats to brands, some components of added value, agent or the retail outlet which originally
added value by matching consumers with suppliers, may be eliminated.

4) Opportunities from technology: - Brand marketers are now able to take advantage of technology to
again a competitive advantage through time. Technology is already reducing the lead time needed to
respond rapidly to changing customers need and minimizing any delays in the supply chain.

5) More sophisticated buyers: - In business-to-business marketing, there is already an emphasis on
bringing together individuals from different departments to evaluate suppliers’ new brands. As inter
departmental barriers break down even more, sellers are going to face increasingly sophisticated buyers
who are served by better information system enabling them to pay off brand suppliers against each other.

6) The growth of corporate branding:- With media inhabiting individual brand advertising, many firms are
putting more emphasis on corporate branding, unifying their portfolio of brands through clearer linkages
with the corporation, which clarifies the those all the line brands adhere to. Through corporate identity
program functional aspects of individual brands in the firm’s portfolio can be augmented, enabling the
consumer to select brands through assessment of the values of competing firms. Firms developed powerful
corporate identity programmes by recognizing the need first to identify their internal corporate values,
from which flow employee attitudes and specific types of staff behavior secondly, to devise integrated
communication programmes for different external audiences.

Identifying and Establishing Brand Positioning

Brand positioning is a strategic act of designing the company’s offer and image so that it occupies a
distinct and valued place in the target customer’s mind, such that the potential of product is maximized.
The tools used to do the competitive brand position are among others.

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Mian USMAN                                                                Mirza Nadeem
03017051059                                                               03003718143
      Points of difference and points of parity
      A mental map is a visual depiction of the different types of association
      Sources of brand equity CBBE model
      Designing and implementing brand mantras

Planning Implementing Brand Marketing Program

Building brand equity required creating a brand that customers are adequately aware of and have
developed unique associations. Knowledge-building process normally follows three steps.
    Choice of Brand Elements
    Integrating marketing activities and supporting marketing programs
    Leveraging the other associations to link the brand with other entity.

Measuring and Explaining Brand Performance

To assess the brand’s positioning invariably benefits from various tools, namely:
Brand Audit
The Brand Value Chain
A Brand Equity Measurement System
Brand Tracking

Growing and Sustaining Brand Equity

Maintaining and expanding on brand equity can be quite challenging. Brand equity management activities
taken a broader and more diverse perspective of the brand’s equity. Managing brand equity would mean
managing brands within the context of multiple segments, multiple categories over time.

 To grow and sustain brand equity needs various branding activities and application of specific tools such

The Brand-Product Matrix
The Brand Hierarchy
The Brand Portfolio

A long term view also produces proactive strategies designed to maintain and enhance customer based
brand equity over time, in the face of external changes in the marketing environment and internal changes
in the firm’s marketing goals and programs. Besides, in expanding a brand globally, manager need to
build equity by relying on specific knowledge about the experience and behaviors of those market

Customer Based Brand Equity
Brand equity is a good barometer to understand past action and future course of action for marketers, who
are active in formulating strategies for a given brand. If in present, customer has developed favorable

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Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
attitude towards the brand then it is a clear indication that past investment (time, money, etc) have found
there mark.
The present also leads the way how marketers should plan future course, as to achieve desired results. But
one aspect is absolutely clear that brand knowledge is a key factor in establishing brand equity.


Brand Awareness
Brand awareness is the probability that consumers are familiar about the life and availability of the
product. It is the degree to which consumers precisely associate the brand with the specific product. It is
measured as ratio of niche market that has former knowledge of brand. Brand awareness includes both
brand recognition as well as brand recall. Brand recognition is the ability of consumer to recognize prior
knowledge of brand when they are asked questions about that brand or when they are shown that specific
brand, i.e., the consumers can clearly differentiate the brand as having being earlier noticed or heard.
While brand recall is the potential of customer to recover a brand from his memory when given the
product class/category, needs satisfied by that category or buying scenario as a signal. In other words, it
refers that consumers should correctly recover brand from the memory when given a clue or he can recall
the specific brand when the product category is mentioned. It is generally easier to recognize a brand
rather than recall it from the memory.

Brand Image

Brand image is the current view of the customers about a brand. It can be defined as a unique bundle of
associations within the minds of target customers. It signifies what the brand presently stands for. It is a
set of beliefs held about a specific brand. In short, it is nothing but the consumers’ perception about the
product. It is the manner in which a specific brand is positioned in the market. Brand image conveys
emotional value and not just a mental image. Brand image is nothing but an organization’s character. It is
an accumulation of contact and observation by people external to an organization. It should highlight an
organization’s mission and vision to all. The main elements of positive brand image are- unique logo
reflecting organization’s image, slogan describing organization’s business in brief and brand identifier
supporting the key values.

Brand image is the overall impression in consumers’ mind that is formed from all sources. Consumers
develop various associations with the brand. Based on these associations, they form brand image. An
image is formed about the brand on the basis of subjective perceptions of associations bundle that the
consumers have about the brand. Volvo is associated with safety. Toyota is associated with reliability.

Brand equity is a set of advantage connected to a brand’s name and
symbol that supplements to (or removes from) the worth provided by a
product or service to a firm and/or that firm’s customers. The main asset
categories are:
     Brand name awareness
     Brand loyalty
     Perceived quality
     Brand associations.
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
Brand equity is a group of assets. So, the management of brand
equity contents investment to create and enlarge these assets. Figure 1
obtained from and mentioned in managing brand equity, make a compact
overview of how brand equity makes up value.


Customer based brand equity is specified as the differential result of
brand familiarity on consumer response to the marketing of the brand. Three
important ideas are included in the definition:
a. Differential effect
b. Brand knowledge
c. Consumer response to marketing.

Differential effect is decided by comparing consumer reaction to the
marketing of a brand with the response to the same marketing of a
fictitiously named or unnamed version of the product or service.

Brand knowledge is delineated in terms of brand consciousness and
brand image and is imagined in accordace with the characteristics and
relationships of brand associations described previously.

Consumer response to marketing is explained in terms of consumer
perceptions, preferences, and behaviour coming from marketing mix
So, with regard to this explanation, a brand is said to have positive
(negative) customer based brand equity if consumers react more (less)
approvingly to the product, price, promotion, or dispersion of the brand than
they do to the same marketing mix component when it is attributed to a
fictitiously named or unnamed version of the product or service.

Building customer based brand equity demands the creation of a
common brand that has approving, strong, and unique brand associations.
This can be done both through the first choice of the brand identities, such
as the brand name, logo, or symbol, and through the merging of the brand
identities into the supporting marketing program.[5]

Brand value think over the role of relationships in value creation and
the brand equity considers the appraisal of the value that is created through
these relationships. It is generally recognised that brands are important
assets for firms.[6]

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Mian USMAN                                                                      Mirza Nadeem
03017051059                                                                     03003718143
Brand value represents what the brand intends to a focal company.
Brand value may vary contingent upon the owner of the brand, because
different owners can capture more or less possible value according to their
capacity to leverage brand equity. More formally, we define brand value as
the sale or replacement value of a brand. Brand value is impacted by brand
equity to the extent that brand equity play role in more positive financial
result in favour of the brand.[7]

Figure 3 shows how two degree of brand value, ‘current’ and
‘appropriable,’ can differ based on the company in possession of the brand.
Both measures of brand value are personel and relying on the resources and
abilities of a focal firm. For a specific firm at a particular point in time – all
other things being equal – that firm will have a ‘current’ value. This current
value is based on scheduled profits that will accrue to that firm given
existing strategies, capabilities and resources. However, there clearly exists
a higher ‘appropriable’ value that it or another firm could take if it could
more effectively leverage the existing brand equity.

Simply put, the distinction between the current and appropriable
value of a brand is based on the firm’s ability to leverage the brand equity of
that brand. Appropriable brand value represents the theoretical value that
could be reached if all existing brand equity were optimally leveraged. The
‘current’ measure of brand value is ‘what is’ for a particular firm, while
unleveraged brand equity helps define ‘what can be,’ that is, the
appropriable value, for a firm.[8]

In contemporary managerial thought the value of a brand is thought
to reside in its ‘brand equity’. Brand equity stands for its capacity to
generate a future value stream, either through its ability to extract a
premium price from consumers (for example, being prepared to pay more
for a Rolex watch than for an unbranded, if functionally equivalent, watch)
or through its ability to attract capital (for example, investors prefer to place
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Mian USMAN                                                                       Mirza Nadeem
03017051059                                                                      03003718143
their funds in a company that they know and sympathise with), or otherwise
facilitate relations with interested parties (distributors, producers etc).
In recent times the first dimension, or ‘customer-based brand equity’, has
grown more important.3 Customerbased brand equity is generally defined as
the set of associations or attitudes that consumers have in relation to the
brand, and that contribute to its value for them. An important part of the
value of a brand thus resides in the minds of consumers. What trade mark
law protects from ‘dilution’ is primarily the property over a specific set of
attitudes and associations entertained by consumers; a property over a
specific share of mind. [9]

We have many technics to evaluate brand equity. A widespread
appraising technic is to handle brand equity in the way of its influence on
product evaluation. In spite of the empirical support for the concept of
brand equity is bounded, the rudimentary concept of brand equity can be
clarified by two theories. One theory that explicates brand equity is the
spreading activation theory of human related memory. With regard to this
theory, the declarative knowledge of consumers is delineated in the way of
the network of concept nodes that are connected by links and fortified
whenever two events co-occur. When consumers experience different concepts, they constitute relations.
When consumers think of a brand, they relate it with the positive outcomes that are connected with the
brand and
they link the product to these outcomes. So, the more a brand name cooccurs with a benefit, the stronger
the link between the brand name and the benefit, therefore building brand equity.

As it is known, to achieve a successful sale performance in national and international markets in which
global crucial rival is dominant, managements should plan and execute their brand strategies very well.
In this context, companies which manages their brand good and produces customer focused strategies can
easily raise their brand equity.

4 Choosing Brand Elements to Build Brand

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Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
Branding is one of fundemental decision in marketing products, in
which an organization uses a name, phrase, stile, symbols, or combination
of these to recognize its products and separate them from those of rivals. A
brand name is any word, device (design, sound, shape, or color), or
combination of these used to separate a seller’s goods or services.

The key to creating a brand, with regard to the AMA definition, is to
be able to choose a name, logo, stile, case, design or other attribute that
recognize a product and differentiates it from others. These different constituents of a brand that recognize
and differentiate it can be called brand
elements. There are six criteria in choosing brand elements:

       Memorability
       Meaningfulness
       Likability
       Transferability
       Adaptability
       Protectability

The explanation of the six criteria given below;

Memorability: A essential condition for building brand equity is
succeeding a high level of brand awareness. To that aim, brand elements can
be choosen that are inherently memorable and hence facilitate remind or
recognition in buy or consumption settings.

Meaningfulness: In addition to choosing brand elements to build
awareness, brand elements can also be choosen whose inherent meaning
enlarges the creation of brand associations. Brand elements may take on all
kinds of meaning, altering in descriptive, besides persuasive, content.

Likability: The associations recommended by a brand element may
not always be concerned to the product. So, brand elements can be choosen
that are rich in visual and verbal imagery and inherently fun and interesting.

Transferability: The forth general criterion interests the
transferability of the brand element in both a product category and
geographic sense.

Adaptability: The fifth consideration interests the adaptability of the
brand element over time. Because of changes in consumer values and
opinions, or simply because of a need to remain contemporary, brand
elements often must be updated in course of time.
Protectability: The sixth and final general consideration interests
the dimension to which the brand element is protectable both in a legal and
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                03003718143
competitive sense.


Brand Names
Logos and symbols

Brand Name: Making a brand to be easily memorable starts with the brand name. When we are in happy
mood or enjoying often we coin the term, Yahoo… selecting a brand name is ofcourse required to be very
simple so that it can be easily memorized and remain in our sub-conscious mind. Just try to remember a
brand with a difficult spelling or pronunciation.

Logos and Symbol: Apple, Microsoft Windows, Jaguar, etc are such brands which runs in the mind
through their physical appearances, there symbol or logo. However, that does not mean that every one
shall keep such a symbol. Coca – cola can be recognized by the fonts used in it. Nike with a right sign,
Motorola with M written in a circle; these brands have there own association, of making their respective
brands popular.

Slogans: Slogans are very useful in creating a brand positioning. For instance; “Hungry? Snickers Really
Satisfies” positions itself as satisfying hunger. State Farm Insurance’s “like a good neighbor, State Farm is
always there” has been used for decades to represent the brand’s dependability and friendship.

Jingle: Jingles are musical message written around the brand. “Give me Break” jingle for Kit Kat brand
candy has been sung for a long time. Intel’s distinctive three-second, four-not sound signature to their own
or co-op ads echoes the company’s slogan (“In-tel In-side”)

Packaging: Packaging is one of the initial parts of making the brand a successful. The packing of Coca –
Cola is patented all around the world.

Apart from these there are other elements like color, Character Company image etc that makes a
brand to hammer the mind.

Designing Marketing Programs to Build Brand Equity
§    Kotler identifies five major drivers of this new economy.

ü   Digitalization and Connectivity

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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
ü     Disintermediation



ü     Customization



ü     Industry Convergence

ü     New Customer


Company Capabilities

q Personalizing Marketing

§      Experiential Marketing

ü     Focuses on the consumption situation

ü     Views customers as rational and emotional animals

ü     Uses electric methods and tools.

In the late 1990s, Coca cola cut its sports sponsorship budget

in half and reinvested in such as developing a coca-cola experience section at Atlanta’s Turner Field
baseball stadium.

In the section, spectators can drink Coke beverage, mix and mingle and watch the game from a preferred
vantage point.

§      One to One Marketing

ü     Focus on individual consumers through consumer databases – “We single out customers”

ü     Responds to consumer dialogue via interactivity – “the consumer talks to us”

ü     Customize products and services – “We make something unique for him or her”.

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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
Personalizing Marketing

 Columbia house-sends its club member a monthly music selection, something the member anticipate and
that is relevant to them. If the member choose not to keep the selection he or she simply returns.

 With customer permission, Amazon uses database software to track it consumer purchase habits and send
them personalizes marketing massage.

 Each time a consumer purchase something from Amazon.com, he or she receive a follow up e-mail
containing information about other products that might interest him or her based on that purchase.

§    Reconciling the New Marketing Approaches According to the CBBE model,

Ø   the different approaches emphasize different aspects of brand equity.

Ø    One to one and permission marketing can be seen as particularly effective at creating stronger
behavioral loyalty and attitudinal attachment.

Ø Experiential marketing on the other hand would seem to be particularly effective at establishing brand
imagery and trapping into a variety of different feelings as well as helping to build brand communities.

Ø      Firms must still devise product, pricing and distribution strategies as part of their marketing


•    Perceived Quality and Value

ü Performance – levels at which the primary characteristics of the product operate (e.g. low, medium,
high or very high)

ü   Features – Secondary of a product that complement the primary characteristics

ü   Conformance quality – degree to which the product meets specification and is absent of defects.

ü   Reliability – consistency of performance over time and from purchase to purchase.

ü   Durability – expected economic life of the product

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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
ü   Serviceability – ease of servicing the product

ü   Style and Design – appearance or feel of quality

a) Brand Intangible :

Product quality also be affected by factors such as the speed, accuracy and care of the product delivery
and installation; the promptness, courtesy and helpfulness of customer service and training; and the quality
of repair service.

b) Total Quality Management and Return On Quality:

§    ROQ strategies

ü   Start with an effective quality program

ü   Calculate the cost of current quality initiatives

ü   Determine what key factors retain customers.

ü Roll out successful programs after pilot-testing the most promising efforts and cutting the ones that
don’t have a big impact.

ü   Improve programs continually

c) Value Chain:

For example, Procter and Gamble works closely with retailers

such as Wal-Mart to ensure that P&G brands can be

quickly and efficiently distributed to stores.

2. Relationship Marketing

ü Acquiring new customers can cost five times more than the costs involved in satisfying and retaining
current customers.

ü   The average company loses 10 percent of its customer each year.

ü A 5 percent reduction in the customer defection rate can increase profits by 25 percent to 85 percent
depending on the industry.

ü   The customer profit rate tends to increase over the life of the retained customer.
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
a) Mass Customization:

Dell’s built-to-order computers, sold directly by the company on the internet or over the phone, helped
make it the most successful computer manufacturer of the 1990s.

Nike enables customers to put their own personalized massage on a pair of shoes with the NIKE iD
program. At the NIKE iD web site, visitors can make a customized shoe by the selection the size, width
and color scheme and affixing an eight character personnel Id to their creation.

Proctor & Gamble, which sells customized coffee over the Internet    with its Millstone brand. General
Nutrition Center (GNC) which has put machines at a dozen of its Live well stores that custom-mix daily
vitamins , shampoo and lotions.

Procter & Gamble launched reflcet.com, a customizable beauty product site

b) After Marketing:

ü Instruction manuals for any products are too often an afterthought, put together by engineers who use
overly technical terms and convoluted language.

ü Reminds business of the importance of building a lasting relationship with customers, to extend their

ü     Also point to the crucial need to better balance the allocation of marketing funds between
conquest/invasion activities (like advertising) and relation activities (like customer communication

§        After Marketing Activities

ü      Establishing and maintaining a customer information file

ü      Blueprinting/ Planning customer contacts

ü      Analyzing customer feedback (explore the nature of satisfaction and dissatisfaction)

ü      Concluding customer satisfaction surveys

ü        Formulating and managing communication programs (sending customer proprietary magazine or

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Mian USMAN                                                               Mirza Nadeem
03017051059                                                              03003718143
ü       Hosting special customer events or programs

ü       Identifying and reclaiming lost customers

c) Loyalty Programs:

ü       Know your audience

ü       Change is good

ü       Listen to your best customer suggestion

ü       Engage people


1. Consumer price perceptions

ü Consumer may combine their perception of the quality of the product with their perception of the price
of the product to arrive at an assessment of its perceived value.

ü Consumer perception of value should obviously exceed the cost to the company of making and selling
their product

 Hitachi and General Electric jointly owned a factory in England that made identical televisions for the
two companies. The only difference was the brand name on the television. Nevertheless, the Hitachi
televisions sold for a $75 premium over the GE television. Moreover Hitachi sold twice as many sets as
GE despite the higher price.

§    Understanding Consumer Price Perception

Internal reference prices

ü   Fair price (what product should cost)

ü   Typical price

ü   Last price

ü   Upper bound price ( most consumer would pay)

ü   Lower bound price (least consumer would pay)

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Mian USMAN                                                               Mirza Nadeem
03017051059                                                              03003718143
ü   Competitive price

ü   Expected future price

ü   Usual discount price

Research has shown that a relatively more expensive item can be seen as less expensive by breaking the
price down into smaller units

(e.g. a $500 annual membership is seen as more expensive than less than $50 a month) .

Research is also shown that one reason why prices often end with the number nine (e.g. $49.99) is that
consumers process prices in a left to right manner rather than holistically or by rounding.

2. Setting Prices to Build Brand Equity

ü   A method or approach for how current prices will be set

ü   A policy or set of guidelines for the depth and duration of promotions and discounts over time

•    Value Pricing

ü   To uncover the right blend of product quality, product cost and product pricing

ü   That fully satisfies the needs and wants of consumers and the profit target to the firm.

 For example, Wal-Mart’s slogan “We Sell for Less” describes the pricing strategy that has allowed them
to become the world’s largest retailer.

 Southwest Airlines combined low fares with no frills-but friendly- service to become a powerful force in
the airline industry.

 Taco Bell reduced operating costs enough to lower prices for many of the items on their menu to under $1
sparking an industry wide trend in fast foods.

In general an effective value pricing strategy should strike the proper balance among he following:

ü   Product design and delivery

ü   Product costs

ü   Product prices

§    Steps to Better Pricing

Ø   Assess what value your customers place on a product or service
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Mian USMAN                                                                   Mirza Nadeem
03017051059                                                                  03003718143
Ø   Look for variation in the way customers value the product

Ø   Assess customers price sensitivity

Ø   Identity an optimal pricing structure

Ø   Consider competitors reactions.

Ø   Monitor prices realized at the transaction level

Ø   Assess customers emotional response

Ø   Analyze whether the returns are worth the cost to serve

a) Product Design and Delivery :

§     Product value can be enhanced through many types of well conceived and executed marketing

§     Proponents of value pricing point out that the concept does not mean selling stripped down versions
of products at lower prices.

Japanese automakers –by combining high performance at lower prices, Japanese luxury cars such as
Lexus and Infiniti have been able to create strong value perception and sales in the united states against
their American and European competitors.

 Auto critics cheered when the 1997 Camry was to introduced and reviewed as roomier, smoother, faster
and quieter-and cheaper!

 In response Honda held the line on its 1998 Accord, its chief Camry competitors, while also adding more
standard equipment, relaying on manufacturing and engineering innovations to cut costs. Both models still
commanded $2000 to $3000 price premium over comparable American makes.

For example, by investing in efficient manufacturing technology, Sara Lee was able to maintain adequate
margins for years on its L’eggs women’s hosiery with minimal price increase.

 The combination of low prices and the strong L’eggs brand image resulted in an almost 50 percent market

At the same time, cost reductions can not sacrifice quality.

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Mian USMAN                                                                Mirza Nadeem
03017051059                                                               03003718143
c) Product Prices – the final key to a successful value-pricing strategy is to understand exactly how much
value consumers perceive in the brand and thus to what extent they will pay a premium over product costs.

 For example, General motor’s Cadillac division has used target pricing to arrive at the prices of its luxury

 GM marketers determined the optimal price based on assumption about the consumer and then figured
out how to make the car at the right cost to ensure the necessary profit.

§    Everyday Low Pricing

ü Well-conceived, timely sales promotions can provide important financial incentives to consumers and
include sales

ü As has been well documented, trade discounts rose considerably in past years in both breadth and

For example, the total marketing communication expenditures devoted to trade promotions increased
dramatically in the last several decades, from one third to almost one half of the budget total and the
extent of the average price discount, which previously was only 4 percent become around 10 percent to
15 percent

 Unfortunately many of these trade promotion dollars are not always passed along as savings to


§    Procter & Gamble launches Value Pricing

ü   Many retailers didn’t pass the discounts on customers.

ü   Consumer become conditioned to buying brands only when they were discounted or on special

ü   Consumer were looking to private label substitutes to obtain even lower price

§    Problems

ü   Procter & Gamble could not deliver everyday low prices without incurring everyday costs

ü The company cut over head according to four simple guidelines : change the work, do more with less,
eliminate work and reduce cost that can not be passed on to consumers

ü     EDLP reduced list prices by 12 to 24 percent on nearly all Procter & Gamble’s U.S brands and
drastically reduced the use of coupons and trade promotion, cutting spending on the two by 40 percent in
their place Procter & Gamble put greater emphasis on brand building advertising and marketing
communications ( totaling $3 billion in 1994).
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
ü Procter & Gamble also spend more than ever on research and development (over $1 billion in 1994)
and halved the time to market for new products on a global basis.

ü Moreover P & G also improved its relationship with retailers and was rated in a national survey of
retailers as the consumer goods company most helpful in the making retailers more efficient.


§    Channel Design

§    Direct Channel – preferable when

ü   Products information needs are high

ü   Products customize is high

ü   Product quality assurance is important

ü   Logistics are important

§    Indirect channels- preferable when

ü   A broad assortment is essential

ü   Available is critical

ü   After sales service is important

§    Indirect Channels

§    Push and Pull Strategies

§    Service provided by channel member

ü   Marketing research

ü   Communications

ü   Contact matching

ü   Negotiations

ü   Physical distribution

ü   Financing
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Mian USMAN                                                            Mirza Nadeem
03017051059                                                           03003718143
ü   Risk-taking

ü   Service

Integrating Marketing Communications to Build Brand Equity

Challenges in Designing Brand-Building Communications

3 steps model to test marketing communication effectiveness

    1. What is your current brand knowledge? Have you created a detailed mental map?
    2. What is your desired brand knowledge? Have you defined optimal points of parity and points of
       difference and a brand mantra?
    3. How does the communication option help the brand get from current to desired knowledge with
       consumers? Have you clarified the specific effects on knowledge engendered by communications?

Information Processing Model of Communications

    1. Exposure: a person must see or hear the communication
    2. Attention: a person must notice the communication
    3. Comprehension: a person must understand the intended message or arguments of the
    4. Yielding: a person must respond favorably to the intended message or arguments of the
    5. Intensions: a person must plan to act in the desired manner of the communication
    6. Behavior: a person must actually act in the desired manner of the communication
    7. Right message, right place, right time, right consumer
    8. Creative strategy
    9. Ad reflects understanding about product and brand
    10. Ad positions the brand in terms of points of parity and points of difference
    11. Ad motivates consumers to consider purchase of the brand
    12. Ad creates strong brand associations

Overview of Marketing Communication Options

1 Advertising
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Mian USMAN                                                            Mirza Nadeem
03017051059                                                           03003718143
   •   Television, Radio, Magazines, Newspapers, Direct response, Interactive, Outdoor
   •   In designing and evaluating an ad campaign, marketers should distinguish
           – The message strategy or positioning of an ad: what the ad attempts to convey about the
           – The creative strategy: the way the ad expresses the brand claims
   •   Designing effective advertising campaigns is both an art (execution)and a science (message, brand

   •   Two main concerns in devising an advertising strategy :
         1. Defining the proper positioning to maximize brand equity
         2. Identifying the creative strategy to communicate or convey the desired positioning

   •   Define positioning to establish brand equity
          – Competitive frame of reference
                 • Nature of competition
                 • Target market
          – Points of parity attributes or benefits
                 • Necessary
                 • Competitive
          – Points of difference attributes or benefits
                 • Desirable
                 • Deliverable

   •   Market: is the set of all actual and potential buyers who have sufficient interest in, income for, and
       access to a product.
   •   Market Segmentation: divided the market into distinct groups of homogeneous consumers who
       have similar needs and consumer behavior.

Segmentation Bases

   •   Descriptive or customer-oriented: what kind of person or organization the customer is
   •   Behavioral or product-oriented: how the customer thinks of or uses the brand or product

Consumer Segmentation Bases

   •   Behavioral                                 •    Psychographic
          – User status                           –    Value, opinions, and attitudes
          – Usage rate                            –    Activities and lifestyle
          – Usage location                        •    Geographic
          – Brand loyalty                         •    International
          – Benefit sought                        •    regional
   •   Demographic
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
          –   Income
          –   Age
          –   Sex
          –   Race
          –   Family

Business-to-business Segmentation Bases

   •   Nature of good                         •    Demographic
          – Kind                              –    SIC code
          – Where used                        –    Number of employees
          – Type of buy                       –    Number of production workers
   •   Buying condition                       –    Annual sales volume
          – Purchase location                 –    Number of establishments
          – Who buys
          – Type of buy

   •   Identify creative strategy to communicate positioning concept
          – Informational (benefit elaboration)
                  • Problem – solution
                  • Demonstration
                  • Product comparison
                  • Testimonial (celebrity or unknown consumer)

          – Transformational (imagery portrayal)
               • Typical or aspirational usage situation
               • Typical or aspirational user of product
               • Brand personality and values
          – Motivational (“borrowed interest” techniques)
               • Humor
               • Warmth
               • Sex appeal
               • Music
               • Fear
               • Special effects

Print Ad Evaluation Criteria

   •   Communication strategy
           – Target market
           – Communication objectives
           – Message strategy
   • Execution strategy
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Mian USMAN                                                             Mirza Nadeem
03017051059                                                            03003718143
           –   Is the message clear at a glance? Can you quickly tell what the advertisement is all about?
           –   Is the benefit in the headline?
           –   Does the illustration support the headline?
           –   Does the first line of the copy support or explain the headline and illustration?
           –   Is the ad easy to read and follow?
           –   Is the product easily identified?
           –   Is the brand or sponsor clearly identified?

Direct Response

   •    3 critical ingredients to implement an effective direct marketing program:
   1.   Developing an up-to-date and informative list of current and potential future customers
   2.   Putting forth the right offer in the right manner
   3.   Tracking the effectiveness of the marketing program

2 Promotions
   •    Sales promotion: are short term incentives to encourage trial or usage of a product or service.
   •    Whereas advertising typically provided consumers a reason to buy, sales promotions offer
        consumers an incentive to buy.
            – Change the behavior of the trade so that they carry the brand and actively support it
            – Change the behavior of consumers so that they buy a brand for the first time, buy more of
               the brand, or buy the brand more often

Issues in Designing Sales Promotions

           1. Type: what type of promotion should be used?
                 • Immediate vs. delayed value
                 • Price cut vs. added value
           2. Product scope: to what pack sizes or models should the promotion apply?
                 • Multiple or selective
                 • More or less popular
                 • In-line or out-of-line
           3. Market scope: in which geographic markets should the promotion be offered?
                 • National or regional
           4. Timing: when should the promotion be offered and for how long?
                 • When to promote (in- or off-season)
                 • Duration (long or short)
                 • Frequency (high or low)
           5. Discount Rate: what explicit or implicit discount should the promotion include?
                 • Deep of shallow
           6. Terms: what terms of sales should be attached to the promotion?
                 • Tight or loose

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Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
3 Event Marketing and Sponsorship

   •   Reasons why they support events:
           – To identify with a particular target market or lifestyle.
       Ex. Lexus - U.S. Open
       Ex. Subaru – skiing events
           – To increase awareness of the company or product name
           – To create or reinforce consumer perceptions of key brand image associations
       Ex. Seiko – Olympics
           – To enhance corporate image dimensions
       Ex. Avon – Campaign for A cure
           – To create experiences and evoke feelings
           – To express commitment to the community or on social issues
           – To entertain key clients or reward key employees
           – To permit merchandising or promotional opportunities

4 Personal Selling

   •   Personal selling is face-to-face interaction with one or more prospective purchasers for the purpose
       of making sales.
   •   Keys to better selling:
                           – Rethinking training
                           – Get everyone involved
                           – Inspire from the top
                           – Change the motivation
                           – Forge electronic links
                           – Talk to your customers

Developing Integrated Marketing Communication Programs

Criteria for IMC Programs

Communication Mix Strategy
It needs to develop an integrated communication strategy. The strategy should optimum utilize all possible
communication means. Right mix allows to generate brand awareness, followed by brand loyalty and later
on building up the brand equity, which can be further extended to new product.

Communication options should be mixed keeping in mind six relevant criteria.
  1. Coverage (Proportion of audience reached by right communication option employed)

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Mian USMAN                                                                Mirza Nadeem
03017051059                                                               03003718143
   2. Contribution (The inherent ability of a marketing communication to create the desired response
      and communication effects in the absence of exposure to any other communication option. The
      desired response could be building awareness, enhancing image, electing response including sales)
   3. Commonality (The entire marketing communication program should be coordinated to create a
      consistent and cohesive brand image in which brand association share content and meaning.)
   4. Complimentary (The extent to which different associations and linkage are emphasized across
      communication options.)
   5. Versatility (The extent marketing communication program is robust and effective for different
      groups of consumers. It can be achieved by providing different information in one commercial or
      providing reach information)
   6. Cost (All possible communication options must be weighed against their cost to arrive at most
      effective and efficient communication program which covers the maximum reaches/ target

(7) Leveraging Secondary Brand Knowledge to
Build Brand Equity

Leveraging Secondary Associations
Creation of new brand associations

Effects on existing brand knowledge
       1. Awareness and knowledge of the entity
       2. Meaningfulness of the knowledge of the entity
       3. Transferability of the knowledge of the entity

Brand associations may themselves be linked to other
entities, creating secondary associations:
     1. Company (through branding strategies)
     2. Country of origin (through identification of product origin)
     3. Channels of distribution (through channels strategy)
     4. Other brands (through co-branding) Special case of co-branding is ingredient branding
     5. Characters (through licensing)
     6. Celebrity spokesperson (through endorsement advertising)
     7. Events (through sponsorship)
     8. Other third-party sources (through awards and reviews)

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Mian USMAN                                                                Mirza Nadeem
03017051059                                                               03003718143
This is very useful when the primary or above discussed associations have some deficiency. Secondary brand
knowledge can be leveraged through strong, unique and positive response that may otherwise be not present.

» Company (Relating existing brands with corporate image)

For example, when Headline Today wanted to bring its Initial Public Offer, it used its sub-brand Aaj Tak in
the advertisement and let the general public know that behind Aaj Tak is Headline Today Corporation.

» Country of origin or other Geographic areas

Many countries have become known for expertise in certain product categories or for conveying the particular
type of image. Thus consumer from anywhere may prefer Watch from Switzerland, beer from England,
Vodka from Russia, Software and Tea from India. The famous examples, are Levi’s Jeans from United States,
BMW from Germany and Nike athletic shoes from United States.

» Co-branding

Co-branding is also known as brand alliance or brand bundling. It occurs when two or more existing brands
are combined into a joint product are marketed into a same fashion.

It can generate greater sales from the target market as well as open additional opportunities with new
consumers and channels. It can reduce the cost of production introduction of two well-known images in the
market and also compliment the expertise of each other in Indian context; the best examples are Maruti-
Suzuki, ICICI-Prudential Insurance Company.

Occurs when two or more existing brands are combined into a joint product or are marketed together in some
�� Sony Ericsson
�� Yoplait Trix Yogurt
�� Nestle’s Cheerios Cookie Bars

Advantages of Co-Branding
�� Borrow needed expertise
�� Leverage equity you don’t have
�� Reduce cost of product introduction
�� Expand brand meaning into related categories
�� Broaden meaning
�� Increase access points
�� Source of additional revenue

Disadvantages of Co-Branding

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Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
�� Loss of control
�� Risk of brand equity dilution
�� Negative feedback effects
�� Lack of brand focus and clarity
�� Organizational distractions

Ingredient Branding

�� A special case of co-branding that involves
creating brand equity for materials, components,
or parts that are necessarily contained within
other branded products
�� Examples:
�� Betty Crocker baking mixes with Hershey’s
chocolate syrup
�� Intel inside

» Licensing/ franchisee
When expanding alone is difficult company may provide license to move fast in the market. Sometime, to
avoid immediate risk of enter into the market, even to check market feasibility and to avoid the risk of being
treated as an outsider; companies may prefer to enter through licensing, franchisee to make it sure the safe
and fixed return while getting an opportunity to sell under its own brand name. for example, McDonald’ is the
best example of providing franchise worldwide, while marketing it sure that interior is same and quality of
food is maintained.

“Involves contractual arrangements whereby firms can use the names, logos, characters, and so forth of other
brands for some fixed fee”
�� Examples:
�� Entertainment (Star Wars, Jurassic Park, etc.)
�� Television and cartoon characters (The Simpsons)
�� Designer apparel and accessories (Calvin Klein, Pierre Cardin, etc.)

» Celebrity Endorsement
Well-known and admired people to promote product is a widespread phenomenon which bring immediate
attention to the brand and shapes the perception of the brand by virtue of the inferences.

For example, recently Aishwarya Rai is endorsing Taj Mahal tea by appealing to public to vote for Taj Mahal
in seven new wonders of the world by voting through sms, phone or even by logging on

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Mian USMAN                                                                   Mirza Nadeem
03017051059                                                                  03003718143
Draws attention to the brand
Shapes the perceptions of the brand
Celebrity should have a high level of visibility and a rich set of useful associations, judgments, and feelings
Q-Ratings to evaluate celebrities

Celebrity Endorsement: Potential Problems
�� Celebrity endorsers can be overused by endorsing many products that are too varied.
�� There must be a reasonable match between the celebrity and the product.
�� Celebrity endorsers can get in trouble or lose popularity.
�� Many consumers feel that celebrities are doing the endorsement for money and do not necessarily believe
in the endorsed brand.
�� Celebrities may distract attention from the brand.

» Sporting, Cultural or Other Event
It is very important to choose the appropriate event, design the optimal sponsorship program and measure
the effects of sponsorship on brand equity. This sponsored event can contribute to brand equity by becoming
associated to the brand and improving brand awareness, adding new associations and improving the brand
strength of the existing associations.

For example, Recently Sarara group and Indian Cricket are like compliment to each other. Program like
Antakshari on Zee TV was so popular as Close-up Antakshari that it is difficult to recall as Sansui Antakshari.

» Third-Party Sources
Awards won and reviews accolades the performance not just of the company but even confirms the trust of
consumers. The third-party sources can be seen as a mark of quality and are perceived as credible. For
example, various toothpaste brands are linked in India with Indian Dental Association, British Dental
Association, etc.

8 Developing A Brand Equity Measurement &
Management System

Why Measure Brand Equity?

•     Measuring brand equity allows a company to establish a baseline and track changes in its brand equity
over time

•    A company can better understand and therefore determine if equity in a given brand can be leveraged or
transferred to an entirely new product or service category.

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Mian USMAN                                                                       Mirza Nadeem
03017051059                                                                      03003718143
•   A company may want to measure its brand equity to aid in assigning a monetary value to a brand.

Brand performance can be easily tracked by identifying brand value chain.
» Brand value chain is a structured approach to assessing the sources and outcome of brand equity and the
manner by which marketing activities create brand value.

Brand value chain resides on certain premises.
» It assumed that the value of a brand ultimately resides with the customers.
» Brand value creation process begins when firm invests on marketing program.
» The marketing program affects consumer mindset. The ability of the marketing program to affect the
customer mindset will depend on the quality of the program investment, which is based on Program
» This mindset, across the group of consumers results in certain outcomes, which then charges the market
performance of a brand.
» Shareholders also consider the market performance to arrive at an assessment of shareholder value in
general and brand in particular. In short, companies with strong and proven brand names may have more
shareholder interests.

» Brand Equity Management System

According to Kevin Lane Keller, it is defined as a set of organizational processes designed to improve the
understanding and use of brand equity within a firm.

This insures the likelihood that ‘good’ decisions about the brand would be made. It at least ensures the
decreasing likelihood of ‘bad’ decisions about brand.

Most of the time, brand equity faces severe threat within organisation because of lack of clarity and
concentrating more on short-term or immediate gain. Moreover, marketing activities are individual based
rather than part of overall marketing programs. Following are the ways to reduce internal threat to brand

» Creating written Framework

This includes meaning, scope, present position and desired future status of brand equity, identifying strategies
to measure brand equity and setting procedures wherever needed.

» Creating Report

On the basis of the above framework, actual report is prepared on the basis of brand movement. Report is
prepared on regular basis (monthly, quarterly, half-yearly and so on). It is guiding about what is happening and
why it is happening to brand equity.

» Creating Responsibility Centers

Brand needs long-term nurturing. It needs to identify the responsibility centre to make it sure that right kind
of commitment and passion is developed towards brand. It should be created for both the existing brands as

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03017051059                                                                   03003718143
well as new brands. The purpose is to develop brand as an individual and also the brand portfolio. It should
be created.

» Within Organisation
» With trade partners – to make it sure that a company is getting right support from trade partners.

8 Developing A Brand Equity Measurement &
Management System
The Brand Value Chain

The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the
manner by which marketing activities create brand value.

Value Stages

Marketing program investment
    Any marketing program that can be attributed to brand value development
Customer mindset
    In what way have customers been changed as a result of the marketing program?
Market performance
    How do customers respond in the marketplace?
Shareholder value

�� Program quality multiplier
    The ability of the marketing program to affect customer mindset
    Must be clear, relevant, distinct, and consistent
�� Customer multiplier
    The extent to which value created in the minds of customers affects market performance
    It depends on factors such as competitive superiority, channel support, and customer size and profile
�� Market multiplier
    The extent to which the value generated through brand market performance is manifested in
      shareholder value
      It’s depends on factors such as market dynamics, growth potential, risk          profile, and
       brand contribution
Brand Equity Measurement System

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Mian USMAN                                                                    Mirza Nadeem
03017051059                                                                   03003718143
A set of research procedures that is designed to provide timely, accurate, and actionable information for
marketers so that they can make the best possible tactical decisions in the short run and strategic decisions in
the long run

      Conducting brand audits
      Developing tracking procedures
      Designing a brand equity management system

Designing Brand Tracking Studies
    Tracking studies involve information collected from consumers on a routine basis over time
    Often done on a “continuous” basis
    Provide descriptive and diagnostic information

What to Track
   Customize tracking surveys to address the specific issues faced by the brand
   Product-brand tracking
   Corporate or family brand tracking
   Global tracking

How to Conduct Tracking Studies
�� Who to track (target market)
�� When and where to track (how frequently)
�� How to interpret brand tracking

Brand tracking
Brand tracking studies allow marketers to monitor the health of the brand and provide insights into the
effectiveness of marketing programs implemented by the company.


Each brand faces different issues, which often required customized tracking surveys. Nonetheless, at Relevant
Insights, we always recommend our clients to include measurements of awareness, usage, brand attitudes,
perceptions, and purchase intent in brand tracking studies.
     Awareness: both recall and recognition measures should be collected. They are different indicators of
        the strength of the competition among brands in the minds of the consumers. A brand that first
        comes to mind in certain situations is more likely to be considered than one that is only recognized
        when it is prompted to the consumer.

      Usage: this can be measured through recency, frequency of usage, and total spending in the brand,
       and product category. These brand tracking measures, not only tell us about consumer shopping
       behavior and preferences, but also are indicators of market share and "share of wallet," which is the
       amount of consumer spending a brand is capturing and has a direct impact on a company's revenues
       and profits.
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Mian USMAN                                                                    Mirza Nadeem
03017051059                                                                   03003718143
       Brand Attitudes and Perceptions: this is usually captured through questions related to brand image
        and associations that consumers develop as they experience the brand and are exposed to its
        positioning message through PR, advertising and promotional programs. Many brand associations are
        often beliefs about product-related attributes and benefits. However, brand associations also include
        non-product-related and symbolic benefits. Product and non-product associations, as well as those
        related to price and value are important sources of brand equity and should be part of brand tracking
        studies. Some brand associations are stronger than others, are more easily recalled and are enough
        appealing that they become an important factor in a consumer's decision to buy a brand. Some brands
        may be perceived as unique, but without strong and favorable brand associations, uniqueness really
        doesn't matter (Keller, Strategic Brand Management, 1998).

       Purchase intent: measures of likelihood to buy a brand or switch to a competitor are also indicators
        of brand health and should be part of brand tracking studies, but these questions should be put in
        context regarding specific product or brand, reason for the purchase, time, channel, price and other
        relevant factors to the purchase decision, so they can be predictive of actual purchase behavior.


Brand tracking studies usually involve collecting quantitative data from consumers on a regular basis. One way
to do it is to continuously collect information, which allow us to control for unusual marketing activities, in
the analysis, and provide a more representative picture of how the brand stands in consumers' mind and
against competitors. However, this type of brand tracking may not be feasible due to budget and resources
constraints, and there are other ways to do it (monthly, quarterly, annually, etc.) that can be equally effective.

When determining the frequency of data collection in brand tracking studies, we recommend clients to
    Frequency of product purchase: for example durable goods with long purchase cycles can be
       tracked less frequently.
    Marketing activity in the product category: a category where brands are constantly launching
       marketing programs and promotions should be monitor more often.
    Level of competition in product category: highly competitive product categories, where new
       products and competitors are constantly trying to break in, should be tracked regularly.
    Stability of brand associations: brands with an established image that don't show appreciable
       changes over time, can afford a less frequent brand tracking.

Brand tracking studies are often conducted with current customers, but monitoring non-users of the brand
can prove to be invaluable to the development of an acquisition and market penetration strategy in search for
business growth.


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Mian USMAN                                                                     Mirza Nadeem
03017051059                                                                    03003718143
Given the comparative nature of brand tracking studies, brand tracking measures tend to stay the same over
time. However, they should be revised from time to time to assess their reliability and sensibility. They may be
stable over time and thus reflect stability of brand associations, but they can also be unable to capture
important shifts in the market due to changes in sociodemographic trends, competitive landscape and
economic macrotrends.

Another issue with brand tracking measures is defining what constitutes the desirable level of a particular
metric. Is a 50% level awareness good enough? It depends. It is all relative to the product category and the
competitive environment. In low involvement product categories and those with many competitors, it may be
difficult to get very high levels of awareness and strong brand associations, so the benchmark for what it is a
good level for a metric differs across industries and product categories.

Finally, each brand tracking study should be customized to capture the brand associations that contribute the
most to brand equity and the marketing activities that are effective at strengthening it. The goal is to identify
key drivers that have an impact on consumers' brand choice and purchase behavior and develop marketing
tactics that can lead to brand growth and sustainability.

Brand Equity Management System
A brand equity management system is a set of organizational processes designed to improve the
understanding and use of the brand equity concept within a firm:

�� Brand equity charter
�� Brand equity report
�� Brand equity responsibilities

Brand Equity Charter
    Provides general guidelines to marketing managers within the company as well as key marketing
      partners outside the company
    Should be updated annually

Brand Equity Charter Components
�� Define the firm’s view of the brand equity
�� Describe the scope of the key brands
�� Specify actual and desired equity for the brand
�� Explain how brand equity is measured
�� Suggest how brand equity should be measured
�� Outline how marketing programs should be devised
�� Specify the proper treatment for the brand in terms of trademark usage, packaging, and communication

Brand Equity Report
�� Assembles the results of the tracking survey and other relevant performance measures
�� To be developed monthly, quarterly, or annually
�� Provides descriptive information as to what is happening with the brand as well as diagnostic information
on why it is happening
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Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
Brand Equity Responsibilities
    Organizational responsibilities and processes that aim to maximize long-term brand equity
    Establish position of VP or Director of Equity Management to oversee implementation of Brand
      Equity Charter and Reports
    Ensure that, as much as possible, marketing of the brand is done in a way that reflects the spirit of the
      charter and the substance of the report

Chapter 9 – Measuring Sources of Brand Equity:
Capturing Customer Mindset

Most evaluations of Brand Equity involve utility estimation. Specifically, we attempt to measure the value
(utility) of a product’s features and price level and also measure the overall utility of a product when including
brand name. The difference between total utility and utility of the product features is the value of the brand.

According to a customer-based brand equity perspective, the indirect approach to measuring brand equity
attempts to assess potential sources for brand equity by measuring consumer mindset or brand knowledge.

The indirect approach is useful in identifying what aspects of the brand what aspect of the brand knowledge
may potentially cause the differential response that creates brand equity in the marketplace. Because any one
measure typically only captures one particular aspect of brand knowledge, multiple measures need not to be
employed to account for the multi-dimensional nature of brand knowledge:

Brand awareness can be accessed through a variety of aided and unaided memory measures that can be
applied to test brand recall and recognition; brand image can be assessed through a variety of qualitative and
quantitative techniques. We next review several these various approaches.

I. Qualitative Research Techniques – There are many different ways to uncover and characterize the types
of associations linked to the brand. Qualitative research techniques are often employed to identify possible
brand associations and sources of brand equity. Qualitative research techniques are relatively unstructured
measurement approaches whereby range possible consumer responses are permitted.

Consider the following three qualitative research techniques that can be employed to identify source of brand

1. Free Association – The simplest and often most powerful way to profile brand association

involves free association tasks whereby subjects are asked what comes to mind when they think of the brand
without any more specific probe or cue than perhaps the associated product category (e.g. “what does the
Relox name mean to you?” or “Tell me what comes to mind when you think of Rolex watches.”)
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Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
2. Projective Technique – Uncovering the sources of brand equity requires that consumers’ brand
knowledge structures be profiled as accurately and completely as possible. Unfortunately, under certain
situations, consumers may feel that it would be socially unacceptable or undesirable to express their true

Projective techniques are diagnostic tools to uncover the true opinions and feelings of consumers when they
are unwilling or otherwise unable to express themselves on these matters.

3. Ethnographic and Observational Approaches – Fresh data can be gathered by directly observing
relative actors and settings. Consumers can be unobtrusively observed as they shop or as they consume
products to capture every shade of their behavior. Marketers such as Procter & Gamble seek consumers’
permission to spend time with them in their homes to see how they actually use and experience products.

II. Quantitative Research technique – Although quantitative measures are useful to identify and
characterize the range of possible associations to a brand, more quantitative portrait of the brand often is also
desirable to permit more confident and defensible strategic and tactical recommendations.

Quantitative research typically rings out some type of verbal responses from consumers, quantitative research
typically employees various types of scale questions so that numerical representations and summaries can be

Quantitative measures are often the primary ingredient tracking studies that monitor brand knowledge
structures of consumers overtime.

1. Awareness – Brand awareness is related to the strength of a brand in memory, as reflected by consumers’
ability to identify various brand elements (i.e., the brand name, logo, symbol, character, packaging, and slogan)
under different conditions.

2. Recognition – In short recognition processes require that consumers be able to discriminate a stimulus – a
word, object, image, etc. – as something they have previously seen. Brand recognition relates to consumers’
ability to identify the brand under a variety of circumstances and can involve identification of any of the brand

3. Recall – Brand recall relates to consumers’ ability to identify the brand under a variety of circumstances.
With brand recall, consumers must retrieve the actual brand element from memory when given some related
probe or cue. Thus brand recall is a more demanding memory task than brand recognition because consumers
are not just given a brand element and asked to identify or discriminate it as one they had or had not already

        4. Image – Brand Awareness is an important first step in building brand equity, but usually not
           sufficient. For most customers in most situations, other considerations, such as the meaning or
           image of the brand, also come into play. One vitally important aspect of the brand is its image, as
           reflected by the associations that consumers hold toward the brand. Brand associations come in
           many different forms and can be classified along many different dimensions.

Created by                                             36                         Printed By
Mian USMAN                                                                     Mirza Nadeem
03017051059                                                                    03003718143
Chapter 10 – Measuring Outcomes of Brand Equity:
Capturing Market Performance

“Ideally …it would be possible to create a “brand equity index“ “

“Brand equity is a multidimensional concept and complex enough that many different types of measures
are required“

There are two types of method employed to measure brand equity at source. These two methods are
qualitative research methods and quantitative research methods. Qualitative research methods are ideal for
measuring brand association where in consumer perceptions towards brand are captured. Quantitative
research methods are perfect to understand brand awareness within consumer.

Both above mention methods are only able to capture and measure one dimension of brand equity at a time.
But brand equity is multi-dimensional and therefore it is important to measure each as it will help in taking
tactical as well as strategically important decision.
Comparative methods and holistic methods are designed to directly analyze brand equity. Comparative
methods tend to analyze effects of consumer perception towards brand in respect to marketing programs, in
terms of change in brand awareness. Holistic methods are designed to analyze the total effect of brand
equity. These methods will provide necessary tools to measure outcome
of brand equity. Consumer bases brand equity will lead to loyal customer base, point of differentiation
against competitors get better margins, more acceptances of marketing communication, strong standing in
distribution channel and also support any form of brand extension.

Comparative methods are research methods which measure brand equity associated with brand association
and high level of brand awareness. Comparative methods are again of different types depending on usage
of marketing. Brand based comparative methods looks to measure consumer response against same
marketing program for different brands. Marketing based comparative method looks to measure consumer
response for same brand under different marketing program. Conjoint comparative method looks to
combine both brand based comparative method and marketing based comparative method. Each method
has its application and drawbacks.

Brand based comparative method, as mentioned, tries to examine consumer’s response to identical
marketing response to different brand in the same product category. This could be competitor’s brand, any
non-existing brand or preferred brand in that category. A classic example of such comparative method is
experiment conducted by Larry Percy; in which consumer were ask to map beer taste and preference. In
one first instance brand name were disclosed whereas on second instance brand name was not disclosed.
Consumer showed more loyalty when brand name was disclosed. Brand based method really isolated true
value of brand name and this concept especially holds true when there is a change in marketing program
from past efforts.

Created by                                           37                        Printed By
Mian USMAN                                                                  Mirza Nadeem
03017051059                                                                 03003718143
Marketing based method tries to understand consumer response under different marketing promotions.
Here focus is to understand how much influence marketing program has on brand performance. One such
experiment would be to understand consumer response at different price levels; this will reveal level of
tolerance before consumer switch to another brand. Marketing based method would also be effective in
understanding consumer response to similar marketing program across various geographical locations. The
main advantage of marketing based method is that it can be applicable to any marketing program. However
drawback of this method is that it is difficult to separate whether consumer preference is towards the brand
or product category in general, meaning the price premium discovered may applicable to other brand in
similar product category also.

Conjoint method allows simultaneously study of brand as well as marketing program. This method also
employs statistical calculation making it possible to study many attributes or association at one time.
Disadvantage of this method is that too much experimentation will may increase consumer expectation
with respect to the brand.

Holistic method is used to determine financial value or definite utility value of the brand. Holistic method
looks to measure consumer brand preference over consumer brand response. Residual holistic approach
measures brand equity after subtracting physical attributes of the brand. Valuation holistic approach looks
to measure brand equity in financial term which is important during valuation of whole firm in activities of
merger/acquisition, fund raising etc.

Comparative method and Holistic method are employed to measure benefit of consumer based brand
equity. Comparative method measures consumer response where as holistic method measure consumer
brand consumer preference. These methods are relevant to calculate return of investment for marketing

Created by                                          38                        Printed By
Mian USMAN                                                                 Mirza Nadeem
03017051059                                                                03003718143
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Mian USMAN         Mirza Nadeem
03017051059        03003718143
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Mian USMAN         Mirza Nadeem
03017051059        03003718143
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