Brand Equity

Unit 8
Contents
• Brand equity

• The CBBE Model

• Creating customer value

Strategic Brand Management process
Strategic brand management involves the design and
implementation of marketing programs and and activities to
build, measure and manage brand equity.
Steps

• Identifying and developing brand plans

• Designing and implementing brand marketing programs

• Measuring and interpreting brand performance
• Growing and sustaining brand equity
1.Identifying and developing brand plans
• The brand positioning model – how to guide integrated
marketing to maximize competitive advantage

• The brand resonance model – how to create intense, activity,

loyalty relationships with customers

• The brand value chain – means to trace the value creation

process for brands, to better understand the financial impact of
brand marketing expenditures and investments.
2.Designing and implementing brand
marketing programs
• Choosing brand elements
• Integrating the brand in to marketing activities and the
supporting marketing program
• Leveraging secondary associations
3. Measuring and interpreting brand
performance
• Brand equity management system:

- Brand Audits

- Brand tracking studies

- Brand equity management studies

Brand audits
• A comprehensive examination of a brand to assess its
health, uncover its sources of equity and suggest ways to
improve and leverage that equity.

• A brand audit requires understanding sources of brand

equity from the perspective of both the firm and the
customer
Brand tracking studies

Collect information from the consumers on a routine basis

over time, typically through quantitative measures of brand
performance on a number of key dimensions marketers can
identify in the brand audit or other means.
Brand equity management system
• Set of organizational processes designed to improve the
understanding and use of the brand equity concept within
a firm
4. Growing and sustaining brand equity
• Defining brand architecture

• Managing brand equity over time

• Managing brand equity over geographic boundaries,

cultures and market segments
Brand Equity Concept
Brand equity
• Brand equity has elevated the importance of the brand in
the marketing strategy and provided focus for managerial
interest and research activity

• Brand equity concept has been defined a number of ways

for a number of different purposes. No common view point
has emerged about how conceptualize and measure
brand equity
Basic principle behind branding and brand
equity
• Differences in outcomes arise from the ‘added value’ endowed to
a product as a result of past marketing activity for a brand

• This value can be created for a brand in many different ways

• Brand equity provides a common denominator for interpreting

marketing strategies and assessing the value of the brand

• There are many different ways in which the value of a brand can
be manifested or exploited to benefited the firm
Brand equity
• Brand equity refers to a “value premium that a company
generates from a product or service with a recognizable
name, when compared to a generic equivalent”.

Brand equity is the added value endowed on products

and services, which may be reflected in the way
consumers, think, feel, and act with respect to the brand –
Kotler
Customer based brand equity
CBBE
• CBBE approaches brand equity from the point of view of
the customer.

- What do different brands mean to customers?

- How does the brand knowledge of customers affect their

response to marketing?
CBBE
• The power of the brand lies in what resides in the minds
and hearts of the customers.

• Customer based brand equity – the differential effect

that the brand knowledge has on the customer response
to the marketing of a brand.
Three components
• Differential effect

• Brand knowledge

• Consumer response to marketing

Differential effect
• Brand equity arises from the differences in consumer
response

• If no differences occur then brand-name product can

essentially be classified as a commodity or a generic
version of a product
Brand knowledge
What the customers have

• Learnt
• Felt
• Seen
• Heard

About the brand

Consumer responses to marketing
• Perceptions
• Preferences
• Behaviours

Related to all aspects of brand marketing activities

- Choice of a brand, recall of an ad, response to sales promotion,
evaluations of proposed brand extension
Marketing advantage of strong brands
• Improved perceptions of product performance
• Greater loyalty
• Less vulnerability to competitive marketing actions
• Less vulnerability to marketing crises
• Larger margins
• More inelastic consumer responses when price increases
• More elastic consumer responses when price decreases
• Greater trade cooperation and support
• Increased marketing communication effectiveness
• Possible licensing opportunities
• Additional brand extension opportunities
Brand equity as a vital bridge

• Brands as a reflection of the past

• Brands as a direction for the future

Brands as a reflection of the past

• Marketing costs are not expenses but investments from

where consumers saw, heard, learned, felt and
experienced about the brand.

• The quality of brand building is essential and not the

quantity
Brands as a direction for the future

• Brand knowledge that consumers create over time

dictates appropriate and inappropriate future directions for
the brand

• Consumers decide where they think the brand should go

and grant permission to any marketing program or activity
by either accepting or rejecting it.
Making a brand strong- Brand knowledge
Brand knowledge is the key to creating brand equity.

Brand knowledge has two components

• Brand awareness

• Brand image
Brand awareness
• The customers ability to identify the brand under different
conditions.

• It is a necessary but not a sufficient condition to build

brand equity
Brand image
• The consumers perception about a brand as reflected by
the brand associations held in consumer memory

e.g- PayTm
• Easy to use
• Secure
• Multiple work
• Faster
• One stop shop
Sources of brand equity
CBBE
• CBBE occurs when the customer has a high level of
awareness and familiarity with the brand and holds some
strong, favorable and unique brand associations in
memory

• In some cases familiarity and awareness are enough and

in some others it is not sufficient where unique strong and
favorable associations are required
Brand Awareness
Brand Awareness
• Brand recognition – Consumers ability to confirm prior
exposure to the brand when given the brand has a cue. ( Can
they recognize a brand as hey have already been exposed to it?)

• Brand recall performance- consumer’s ability to recognize a

brand from memory when given the product category, the needs
fulfilled by the category or the purchase or usage situation is given
as a cue.

• Brand recognition seems to be more important in point of

purchase
Advantages of brand awareness

• Learning advantages

• Consideration advantages

• Choice advantages
Learning advantages
• The first step in brand equity is to register the brand in he
minds of the consumers

• This is done by using the right brand elements which

would create interest and make the customers learn
about the identification of the brand.
Consideration advantages

Raising brand awareness increases the likelihood of the

brand being a member of the consideration set, the handful
of brands that receive serious consideration for the
purpose.
Choice advantages
• Brand awareness can affect the choices among brands in
the consideration set even if there are essentially no other
associations to those brands

• Especially in case of low involvement decisions where

there are relatively less decision rules being applied, the
minimum level of brand awareness may be sufficient for
product choice.
Establishing brand awareness
• Creating brand awareness is all about increasing familiarity of the
brand through repeated exposures- generally more effective for
recognition than recall

• Brand elements when exposed through multiple marketing

activities increase familiarity and awareness

• Repetition increases recognizability but improving brand recall

also requires linkage to memory to appropriate product categories
and other purchase consumption cues.
Brand Image
Brand image
• Creating a brand image takes marketing programs that
link strong, favorable and unique associations to the
brand in memory.
• Brand associations may be either

- Brand attributes

- Brand benefits
Brand associations
• Strength of brand associations

• Favorability of brand associations

• Uniqueness of brand associations

Strength of brand associations
When a person thinks more about product information and
relates it to existing brand knowledge

• Personal relevance to the information

• Consistency of the information

Direct associations are the strongest and company created are the
weakest
Favorability of brand associations
• Created by convincing customers that brand possesses
relevant attributes and benefits that satisfy their needs
and wants so as to develop positive overall brand
judgments.

• Consumers will not hold all brand associations to be

equally important, nor they will view them all favorably or
value them all equally across different purchase or
consumption situations.
Uniqueness of brand associations
• The unique differences expressed through the brand
positioning can be made explicit through direct
comparisons with competitors or highlighted implicitly

Apart from individual brand or product associations

category associations are also considered important as
they might change the overall evaluation of the category or
specific beliefs and attitudes.
Brand Resonance Model
Building a strong brand
1. Ensure identification of the brand with consumers and an association of
the brand in the consumer’s minds with a specific product class, product
benefit or customer need.

2. Firmly establish the totality of the brand meaning in the minds of the
consumers by strategically linking a host of tangible and intangible brand
associations

3. Elicit proper customer responses to the brand

4. Convert brand responses to create brand resonance and an intense,

active, loyalty relationship between customers and the brand
Four steps of brand building
1. Who are you? ( Brand identity)

2. What are you ?( Brand Meaning)

3. What about you ? ( What do I think about you? (Brand responses)

4. What about you and me? What kind of association and how much of
a connection would I like to have with you? (Brand relationships)
Six building blocks
• Salience
• Performance
• Imagery
• Judgments
• Feelings
• Resonance
Brand Resonance pyramid
Brand salience
• Brand salience measures various aspects of the
awareness of the brand and how easily and often the
brand is evoked under various situations or
circumstances

- To what extent is the brand top-of-mind and easily recalled or

recognized?
- What type of cues or reminders are necessary?
- How pervasive is this brand awareness?
Brand salience
Brand salience
• Breadth and depth of awareness

• Product category structure

• Strategic implications
Breadth and depth of awareness
• The depth of the awareness measures how likely it is for
a brand element to come in to mind, and the ease with
which it does so.

• The breadth of the awareness measures the range of

purchase and usage situations in which the brand
element comes to mind and depends to a large extent on
the organization of the brand and the product knowledge
in memory
Product category structure
• How product categories are organized in memory

• Levels
- Product class information
- Product category information
- Product type information
- Brand Information
Strategic implications
• Brands should not only be on the ‘top of the mind’ and
have ‘mind share’ but it must also do so at right times at
right places.

• It is not about whether the consumers think about the

brand but more about
• Where they think about it
• When they think of it
• How often they think of it
- Fevicol
Brand performance
Brand performance
• How well the products or services meets customers’ more
functional needs?
• How well does the brand rate on objective assessments
of quality?
• To what extent does the brand satisfy utilitarian, aesthetic
and economic consumer needs and wants in the product
or the service category?

- Hero Honda
Types of attributes and benefits underlying
brand performance
1. Primary ingredients and supplementary features

2. Product reliability, durability and serviceability

3. Service effectiveness, efficiency and empathy

4. Style and design

5. Price
Brand imagery
Brand imagery
• Depends on the extrinsic properties of the product or service
including the ways in which the brand attempts to meets the
customers psychological or social needs

• Way the people think about a brand abstractly, rather than what they
think the brand actually does

• Intangible aspects of the brand and consumers form imagery

associations directly from their own experience or indirectly through
advertisements or word of mouth
Intangibles
• User profiles

• Purchase and usage situations

• Personality and values

• History, heritage and experiences

User imagery
• Gender – Femina, Axe Effect

• Age – Red bull

• Race – Star Plus

• Income - Dolce and Gabbana

Purchase and usage imagery
• Conditions or situations where the consumers can or
should buy and use the brand

- Snickers – Hungry Kya ?

Brand personality and values

• Sincerity (down to earth, honest, wholesome, cheerful)

• Excitement ( daring, spirited, imaginative and up to date)

• Competence ( reliable, intelligent, successful)
• Sophistication ( upper class and charming)
• Ruggedness ( outdoorsy and tough)
Brand history, heritage and experience
• Brands may take on associations to their past and certain
noteworthy events in the brand’s history

• recall can happen based on personal experiences or past

behaviours and experiences of friends, family or others
Brand Judgments
Brand Judgments
• Customer’s personal opinions about and evaluations of
the brand which they form by putting together all the
different brand performance and imagery associations

• Quality
• Credibility
• Consideration
• Superiority
Brand quality
• Perceived quality

• Customer value

• Satisfaction
Brand credibility
• The extent to which consumers see the brand as credible
in terms of

1. Competent, innovative and a market leader (brand expertise)

2. Dependable and keeping customer’s interest in mind ( brand
trustworthiness)
3. Fun, interesting and worth spending time with (brand likeability)
Brand consideration

• Personal relevance

• Brand consideration depends in large part of the extent to

which strong and favorable brand associations can be
created as part of the brand image
Brand superiority
• Uniqueness

• Better than other brands

• Advantageous
Brand feelings
Brand feelings
• Customer’s emotional responses and reactions to the
brand

• What feelings are evoked by the marketing programs for

the brand or by other means?
• How does the brand affect the customer’s feelings about
themselves and their relationships with others?
Brand building feelings
• Warmth – Taj
• Fun- Disney
• Excitement- IPL
• Security – LIC, VOLVO
• Social Approval- Hugo Boss
• Self respect - Dove
Brand Resonance
Brand resonance
• The final step focusing on the ultimate relationship and
level of identification that the customer has with the brand

• Brand resonance describes the nature of the relationship

and the extent to which the customers feel that they are in
sync with the brand
Brand resonance
• Behavioral loyalty

• Attitudinal attachment

• Sense of community

• Active engagement
Behavioral loyalty

• How often do customers buy the brand?

• How much do they purchase ?

- Complan
Attitudinal attachment

• Resonance require a personal attachment

• Attitudinal attachment related to the level of how much

they love the brand and how much are they serious about
the brand

- Harley Davison
Sense of community
• Identification with a brand community leads to customers
have a affiliation with other people associated with the
brand.

• A strong sense of community among loyal users can

engender favorable brand attitudes and intentions

• - gang of dusters
Active engagement
Willing to invest
• Time
• Energy
• Money
• Other resources
Brand building implications
• Customers own the brand

• Do not take shortcuts with brands

• Brands should have a duality

• Brands should have richness

• Brand resonance provides important focus

Thank you