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Brand Equity and Brand Brand Equity and Brand PositioningPositioning

Mkt4806 Mkt4806 Product and Brand ManagementProduct and Brand ManagementBook: Kevin Lane Keller, Strategic Brand Management, 2Book: Kevin Lane Keller, Strategic Brand Management, 2ndnd Edition EditionChapter 2 Customer-based Brand Equity Chapter 2 Customer-based Brand Equity Chapter 3 Brand Positioning and ValuesChapter 3 Brand Positioning and Values

Lecture note by Polboon NuntamanopLecture note by Polboon Nuntamanop

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What is a Brand?What is a Brand?

A A brandbrand is a name, term, sign, symbol, or is a name, term, sign, symbol, or design which is intended to design which is intended to identifyidentify the the goods or services of one seller or group of goods or services of one seller or group of sellers and to sellers and to differentiatedifferentiate them from those them from those of competitors.of competitors.

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Brand ElementsBrand Elements

A variety of brand elements can be chosen A variety of brand elements can be chosen that inherently enhance brand awareness that inherently enhance brand awareness or facilitate the formation of strong, or facilitate the formation of strong, favorable, and unique brand associationsfavorable, and unique brand associations::

Brand NameBrand Name LogoLogo SymbolSymbol Character Character PackagingPackaging SloganSlogan

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Why ‘branding’ ? Why ‘branding’ ?

What makes a brand strong?What makes a brand strong?

How do you build a strong brand?How do you build a strong brand?

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Customer-based Brand EquityCustomer-based Brand Equity

The The differential effectdifferential effect that that brand knowledgebrand knowledge has on has on consumer responseconsumer response to the marketing to the marketing of that brand. of that brand.

Customer-based brand equityCustomer-based brand equity occurs when occurs when the customer has a high level of awareness the customer has a high level of awareness and familiarity with the brand and hold some and familiarity with the brand and hold some strong, favorable, and unique brand strong, favorable, and unique brand associations in memory. associations in memory.

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Brand EquityBrand Equity

BrandLoyalty

Brand Awareness

Brand Positive Attitude

Brand Occasional users

Brand Association

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An exampleAn example

Brand loyaltyBrand loyalty (10,000 customers (10,000 customers Consume @4/month = 40,000 sales unit/monthConsume @4/month = 40,000 sales unit/month)) Brand Occasional users Brand Occasional users (10,000 X@1 per 2 months (10,000 X@1 per 2 months

= 5000 units sales per month)= 5000 units sales per month) Brand Positive AttitudeBrand Positive Attitude – has a good chance to – has a good chance to

purchase and consume the products under the brand if purchase and consume the products under the brand if motivated.motivated.

Brand AwarenessBrand Awareness – has tendency to try, use or – has tendency to try, use or recommend the products under the brand if convinced.recommend the products under the brand if convinced.

Brand AssociationBrand Association – has tendency to try, use or – has tendency to try, use or recommend the products under the brand. recommend the products under the brand.

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Sources of brand equitySources of brand equity

Brand awarenessBrand awareness Learning advantageLearning advantage Consideration advantageConsideration advantage Choice advantage\Choice advantage\

Brand ImageBrand Image

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Consumer reasons for brand Consumer reasons for brand choices – An examplechoices – An example

Past experiencePast experience PricePrice QualityQuality Personal recommendationPersonal recommendation AdvertisingAdvertising Rating on consumer reportRating on consumer report Environmental performanceEnvironmental performance

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4 Steps of Brand Building 4 Steps of Brand Building

1.1. Ensure Ensure identification of the brandidentification of the brand with with customers with a specific product that meet customers with a specific product that meet customer need.customer need.

2.2. Firmly establish the totality of Firmly establish the totality of brand brand meaningmeaning in the minds of consumers. in the minds of consumers.

3.3. Elicit the Elicit the customer responsescustomer responses to brand to brand identification and brand meaning.identification and brand meaning.

4.4. Convert brand response to create an intense, Convert brand response to create an intense, active, active, loyalty relationshiployalty relationship between between customers and the brand. customers and the brand.

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Brand Building BlocksBrand Building Blocks

IdentityIdentity - who are you?- who are you? MeaningMeaning - what are you? - what are you? ResponseResponse - what about you? - what about you? RelationshipRelationship - what about you and me? - what about you and me?

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SalienceSalience 1.Identity

2.Meaning

3. response

4 relationship

ImageryImageryPerformancePerformance

FeelingsFeelingsJudgmentsJudgments

ResonanceResonance

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Category identificationCategory identificationNeeds satisfiedNeeds satisfied

Product characteristicsProduct characteristicsReliabilityReliability

EffectivenessEffectivenessStyle / design/ priceStyle / design/ price

User profileUser profileUsage situationUsage situationPersonality and valuesPersonality and valuesHistory, heritage, experiencesHistory, heritage, experiences

QualityQualityCreditabilityCreditability

ConsiderationConsiderationSuperioritySuperiority

Warmth /Warmth /Fun / excitementFun / excitementSecuritySecuritySocial approval / self respectSocial approval / self respect

LoyaltyLoyaltyAttachmentAttachmentCommunityCommunityEngagement Engagement

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Brand ResonanceBrand Resonance

Behavioral loyaltyBehavioral loyalty Keep buying the same product and same brand Keep buying the same product and same brand

over years or generationsover years or generations

Attitudinal attachmentAttitudinal attachment Believe in the brand Believe in the brand

Sense of communitySense of community Use the brand because of sense of community or Use the brand because of sense of community or

vice versa, E.g. Apple, Harley Davidsonvice versa, E.g. Apple, Harley Davidson

Active engagementActive engagement

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Product Category StructureProduct Category StructureAn exampleAn example

Beverage

Water Flavored

Non-alcoholic Alcoholic

milkCoffee& tea

juiceSoftdrink

wine beerDistilledspirits

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Brand PositioningBrand Positioning

Brand PositioningBrand Positioning (as defined by Kotler) is “ (as defined by Kotler) is “ an act of designing the company’s offer and an act of designing the company’s offer and image so that it occupies a distinct and image so that it occupies a distinct and valued in the target customer’s mind”.valued in the target customer’s mind”.

Finding a proper ‘location’ in the minds of a Finding a proper ‘location’ in the minds of a group of consumers or market segment so group of consumers or market segment so that they think about a product or service in that they think about a product or service in the ‘right’ or desired way. the ‘right’ or desired way.

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Establishing brand Establishing brand PositioningPositioning

Target marketTarget market Points of parity and Points of DifferencePoints of parity and Points of Difference

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Target marketTarget market

A marketA market is the set of all actual and is the set of all actual and potential buyers who have sufficient potential buyers who have sufficient interests in, income for, and access to a interests in, income for, and access to a product.product.

A market segmentationA market segmentation – a distinct group – a distinct group of homogeneous consumers who have of homogeneous consumers who have similar needs and behavior and thus similar needs and behavior and thus require similar marketing mixes. require similar marketing mixes.

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Segmentation basesSegmentation bases

BehavioralBehavioral E.g. user statusE.g. user status

DemographicDemographic E.g, age, incomeE.g, age, income

PsychographicPsychographic E.g. values, lifestyleE.g. values, lifestyle

GeographicGeographic E.g, local, regional, E.g, local, regional,

international international

Nature of goodNature of good E.g. Semi-finishedE.g. Semi-finished

Buying conditionBuying condition E.g. LocationE.g. Location

DemographicDemographic E.g. SIC codeE.g. SIC code No of employeesNo of employees Sales volumeSales volume

Consumer Consumer Segmentation BasesSegmentation Bases

Business-to-businessBusiness-to-businessSegmentation BasesSegmentation Bases

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Segmentation CriteriaSegmentation Criteria

Identifiability:Identifiability: can segment identification be can segment identification be determined? determined?

Size:Size: is there adequate sales potential in the is there adequate sales potential in the segment?segment?

AccessibilityAccessibility: Can the segment be reached? : Can the segment be reached? ResponsivenessResponsiveness: How favorable will the : How favorable will the

segment respond to a tailored marketing segment respond to a tailored marketing program> program>

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Segments of usersSegments of users

4 Groups of users based on strength of commitment. 4 Groups of users based on strength of commitment.

ConvertibleConvertible – highly likely to switch brands – highly likely to switch brands ShallowShallow – not ready to switch but consider – not ready to switch but consider

alternatives/alternatives/ Average Average – comfortable with their choice, unlikely to – comfortable with their choice, unlikely to

switch brands in the near future. switch brands in the near future. EntrenchedEntrenched – loyal to the brand, unlikely to change in – loyal to the brand, unlikely to change in

the foreseeable future. the foreseeable future.

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Points of Parity (POP) andPoints of Parity (POP) andPoints of differences (POD)Points of differences (POD)

Point of ParityPoint of Parity a particular dimension or a particular dimension or attribute or a brand which a group of attribute or a brand which a group of consumers believe that is ‘good enough’ or consumers believe that is ‘good enough’ or meet their basic expectations. meet their basic expectations.

Point of DifferencePoint of Difference A particular attribute or A particular attribute or dimension of a brand which a group of dimension of a brand which a group of consumers likes and perceives as the consumers likes and perceives as the uniqueness of the brand. uniqueness of the brand.

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Point of DifferencesPoint of Differences

Other names:Other names: Competitive Points of Parity Competitive Points of Parity Unique Selling Point Unique Selling Point

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Positioning GuidelinesPositioning Guidelines

1.1. Defining and communicating the Defining and communicating the competitive frame of referencecompetitive frame of reference

2.2. Choosing points of parity and points Choosing points of parity and points of differences.of differences.

3.3. Establishing points of parity and Establishing points of parity and points of differences.points of differences.

4.4. Updating positioning over timeUpdating positioning over time

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Brand ValuesBrand Values

Cores Brand ValuesCores Brand ValuesSet of abstract associations (Attributes Set of abstract associations (Attributes

and benefits) that characterize the 5 to and benefits) that characterize the 5 to 10 most important aspects or dimensions 10 most important aspects or dimensions of a brand. of a brand.

When you think of a brand, what comes When you think of a brand, what comes to mind? to mind?

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Brand MantrasBrand Mantras

Brand MantraBrand Mantra brand essencebrand essenceBrand core promisesBrand core promisesAn articulation of ‘heart and soul’ of the An articulation of ‘heart and soul’ of the

brand.brand.Short phrase that capture the essence or Short phrase that capture the essence or

spirit of the brand positioning and brand spirit of the brand positioning and brand values. values.

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An exampleAn exampleA local (Thai) soymilk brand - VitamilkA local (Thai) soymilk brand - Vitamilk

Core Brand ValuesCore Brand Values Soy-basedSoy-based Quality Quality HealthyHealthy TastyTasty SafetySafety FillingFilling For everyoneFor everyone Widely available anywhere anytime. Widely available anywhere anytime.

Brand MantraBrand Mantra‘‘Vitamilk’Vitamilk’ is a tasty healthy drink. is a tasty healthy drink.