"What is Brand"
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. BRAND vs PRODUCT 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 A product can be quickly outdated.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. Created by 1 Printed By 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 function. 3. Expected Product Created by 2 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 the set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. 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 Created by 3 Printed By 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. Created by 4 Printed By 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 as: 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 segments. 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 Created by 5 Printed By 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. SOURCES OF 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. 2. CREATING BRAND EQUITY: 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. Created by 6 Printed By 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. 3. CUSTOMER BASED BRAND EQUITY 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 activity. 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. 4. THE DIFFERENCE OF BRAND EQUITY AND BRAND VALUE 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. Created by 7 Printed By 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. 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. 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 Created by 8 Printed By 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.  5. EVALUATING THE BRAND EQUITY 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. 6. CONCLUSION 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 Equity Created by 9 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 BRAND ELEMENT CHOICE CRITERIA 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 Created by 10 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 competitive sense. BRAND ELEMENT OPTIONS & TACTICS Brand Names Logos and symbols Characters Slogans Jingles Packaging 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 Created by 11 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 ü Disintermediation and Reintermediation ü Customization and Customerization ü Industry Convergence ü New Customer and 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”. Created by 12 Printed By 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 programs. § PRODUCT STRATEGY • 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 Created by 13 Printed By 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. Created by 14 Printed By 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 lifetimes. 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 program). § 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 newsletters) Created by 15 Printed By 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 q PRICING STRATEGY 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) Created by 16 Printed By 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 Created by 17 Printed By 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 programs § 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 share. At the same time, cost reductions can not sacrifice quality. Created by 18 Printed By 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 cars. 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 depth. 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 consumers. § BRANDING BRIEF: 5-4 § 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). Created by 19 Printed By 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. q CHANNEL STRATEGY § 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 Created by 20 Printed By 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 communication 4. Yielding: a person must respond favorably to the intended message or arguments of the communication 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 Created by 21 Printed By 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 brand – 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 information) • 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 Created by 22 Printed By 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 Created by 23 Printed By 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 Created by 24 Printed By 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) Created by 25 Printed By 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 audience) (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) Created by 26 Printed By 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 fashion Examples: �� 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 Created by 27 Printed By 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 http://new7wonders.com Created by 28 Printed By 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. Created by 29 Printed By 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 Multiplier. » 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 equity. » 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 Created by 30 Printed By Mian USMAN Mirza Nadeem 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 Multipliers �� 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 Created by 31 Printed By 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. WHAT SHOULD BE TRACKED? 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. Created by 32 Printed By 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. WHEN AND WHO TO TRACK? 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 consider: 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. HOW TO INTERPRET BRAND TRACKING MEASURES? Created by 33 Printed By 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 Created by 34 Printed By 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 equity. 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.”) Created by 35 Printed By 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 feelings. 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 made. 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 elements. 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 seen. 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 activities. Created by 38 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 Created by 39 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 Created by 40 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143 Created by 41 Printed By Mian USMAN Mirza Nadeem 03017051059 03003718143