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BUILDING STRONG BRANDSTHREE MODELS FOR DEVELOPING AND

IMPLEMENTING BRAND PLANS

Professor Kevin Lane Keller

Tuck School of Business

Dartmouth College

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The Concept of Customer-Based Brand Equity

Customer-based brand equity

Differential effect

Customer brand knowledge

Customer response to brand marketing

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Building Customer-Based Brand Equity

The initial choices for the brand elements

Brand name, logo, symbol, character, slogan….

Marketing and other activities and supporting marketing programs

Products, services, communications, channels ….

Other associations indirectly transferred to the brand by linking it to some other entities

Other companies, brands, places, people ….

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Benefits of Customer-Based Brand Equity

Enjoy greater brand loyalty & be less vulnerable to competitive marketing actions

Command larger margins & have more inelastic responses to price increases and elastic responses to price decreases

Receive greater trade cooperation & support

Increase marketing communication effectiveness

Yield licensing opportunities

Support brand extensions

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Customer-Based Brand Equityas a “Bridge”

Customer-based brand equity represents the “added value” endowed to a product as a result of past investments in the marketing of a brand.

Customer-based brand equity provides direction and focus for planning future marketing activities

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Three Tools to Facilitate Brand Planning

Holistic marketing requires careful planning and implementation.

To help guide these efforts, three models of increasing scope are presented: 1) brand positioning model describes how to guide integrated

marketing to maximize competitive advantages;

2) brand resonance model describes how to create intense, activity loyalty relationships with customers; and

3) brand value chain model describes how to trace the value creation process to better understand the financial impact of marketing expenditures and investments.

http://www.sogiants.com/

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1. Brand Positioning Model Kevin Lane Keller, Brian Sternthal, and Alice Tybout (2002),

“Three Questions You Need to Ask About Your Brand,” Harvard Business Review, September, 80 (9), 80-89.

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Brand Positioning Brand positioning is about how we want target

customers to think about a brand with respect to competitors

A strong brand positioning helps guide organizational activities by clarifying the brand’s essence, what the brand helps the customer achieve, and how it is unique in doing so

Everyone in the organization should understand the brand positioning and use it as context for making decisions

Classic Brand Positioning Statement

To ___________________________________________________________________,

(Target Group/Need)

_______________is the brand of __________________________________________.

(Brand) Frame of Reference (Perceptual)

Competing Mainly With ___________________________________________________

Frame of Reference (Competitive)

that ___________________________________________________________________,

(Relevant Differentiating Benefit)

because ______________________________________________________________.

(Reason To Believe)

The Brand Character is: ___________________________________________________

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Amazon.com Positioning

For the young at heart who value an infinite amount of choices, Amazon.com is the virtual cookie jar, competing mainly with all brick and mortar stores, that gives you’re the perfect combination of convenience, service, selection and price, because Amazon.com offers a truly global selection of products.

Brand Character: Simple, Friendly, Empowering

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Problems with Classical Positioning Statement

Ignores possibility of multiple points-of-difference

Assumes only 1 key point-of-difference

Ignores need for points-of-parity

Doesn’t provide forward-looking growth platform

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The Four Components of a Superior Competitive Positioning

Competitive frames of reference Nature of competition

Target market

Develop unique brand points-of-difference (POD’s) Desirable to consumer

Deliverable by the brand

Differentiating from competitors

Establish shared brand points-of-parity (POP’s) Negate competitor points-of-difference

Demonstrate category credentials

Brand mantras Short 3-to-5 word phrases that capture key POD’s & the irrefutable

essence or spirit of the brand.

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Coca-Cola Positioning

Competitive frame of reference

Colas?

CSD?

Non-alcoholic?

Points-of-difference

Distinctive taste profile

Optimistic view of life

Classic, iconic symbolism & imagery

Points-of-parity

Contemporary, up-to-date

Refreshing flavor

Brand slogan

“Coke Side of Life”

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Identifying & Choosing POP’s & POD’s

Desirable? (consumer perspective) Personally relevant Believable & credible

Deliverable? (firm perspective) Feasible Profitable Pre-emptive, defensible & difficult to attack

Differentiating? (competitive perspective) Distinctive & superior Sustainable

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Identifying & Choosing POP’s & POD’s

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Principles Reinforced By Miller Lite Launch

Both points-of-parity and points-of-difference are needed to be well-positioned

Points-of-parity and points-of-difference are often negatively correlated

Points-of-parity are NOT points-of-equality –there is a zone or range of indifference or tolerance

Points-of-parity may even need to be the focus of marketing communications as the points-of-difference may be a “given”

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Miller Lite Update

Miller Lite had experienced flagging sales, falling behind both Bud Lite and Coors Lite

Management decides to create a powerful new position … Reaffirm core duality and functional benefit of less filling

& great tasting

Reinforce strong user imagery and emotional appeal as to uncompromising character

By addressing inherent product trade-offs and linking performance & emotional equities … Sales rise 10% during 2004-2005

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Goal: Attack American Express & Marginalize MasterCard

Strategy: Neutralize & Differentiate Point-of-Difference: Acceptability & Convenience

Point-of-Parity: Status, Prestige, & Cachet

Tactics Larger merchant network

Gold and platinum cards

“It’s Everywhere You Want to Be”

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Accenture Straddle Positioning Strategy

Accenture is the company that combines:

Strategic insight, vision, and thought leadership

Information technology expertise in developing client solutions

This strategy permits:

Points-of parity with its two main competitors, McKinsey & IBM

While simultaneously achieving points-of-difference

Technology

& Execution

Strategy

& Vision

Accenture

Straddle Positioning

(WHAT they do)

McKinsey IBM

Strategy

& Vision

Technology &

Execution

POP

POD

POD

POP

Accenture Straddle Positioning

Proactive, Agile,

& Passionate

Approachable &

Collaborative

Accenture

Straddle Positioning

(HOW they do it)

McKinsey IBM

Proactive, Agile,

& Passionate

Approachable

& Collaborative

POP

POD

POD

POP

Accenture Straddle Positioning

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Accenture High Performance. Delivered.

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Accenture High Performance. Delivered.

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Communicating & EstablishingPOP’s & POD’s

Create POP’s and POD’s in the face of attribute & benefit trade-offs Price & quality

Convenience & quality

Taste & low calories

Efficacy & mildness

Power & safety

Ubiquity & prestige

Comprehensiveness (variety) & simplicity

Strength & refinement

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Brand Mantras

Short 3-to-5 word phrases that capture the irrefutable essence or spirit of the brand.

Brand mantra must clearly delineate what the brand is supposed to represent and therefore, at least implicitly, what it is not

Brand mantras typically are designed to capture the brand’s points-of-difference, i.e., what is unique about the brand.

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Brand Mantra Examples

Nike

“Authentic Athletic Performance”

Disney

“Fun Family Entertainment”

American Express

“Worldclass Service, Personal Recognition”

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Brand Mantra Criteria

Communicate A good brand mantra should define the category (or

categories) of business for the brand and set the brand boundaries. It should also clarify what is unique about the

brand. Simplify

An effective brand mantra should be memorable. As a result, it should be short, crisp, and vivid in meaning.

Inspire Ideally, the brand mantra would also stake out ground that

is personally meaningful and relevant to as many employees as possible.

Starbucks Mental Map

sophisticated

earth colors

Seattle

coffee

consistent

convenient/everywhere

wholesome

relaxing

comfortable

predatory

faddish/trendy

snobbish/pretentious

confusing

expensive

customized

varietyexotic

quality

fresh

treat/reward

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Starbucks Competitive Positioning

CompetitorFast food chains/

convenience shops

POP

—Convenience—Value

POD

—Quality—Image—Experience—Variety

Supermarket brands(for home)

—Convenience—Value

—Quality—Image—Experience—Variety—FreshnessLocal cafe —Quality

—Experience—Price—Community

—Convenience

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Starbucks Brand Mantra

“Rich, rewarding coffee experience”

STARBUCKS BRAND POSITIONING WORKSHEETConsumer

TargetDiscerning

Coffee

Drinker

Consumer

InsightCoffee and the

drinking

experience is

often

unsatisfying

Consumer

Need StateDesire for

better coffee

and a better

consumption

experience

Competitive

Product SetLocal cafes

Fast food &

convenience

shops

Consumer

TakeawayStarbucks

gives me the

richest

possible

sensory

experience

drinking

coffee

Brand

MantraRich, Rewarding

Coffee Experience

Fairly

Priced

Relaxing,

rewarding

moments

Responsible,

locally involved

Rich sensory

consumption

experience

Varied, exotic

coffee drinks

Fresh high

quality coffee

24 hour

training of

baristas

Green &

Earth Colors

Siren

logo

Caring

Contemporary

Thoughtful

Convenient,

friendly

service

Triple

Filtrated

water

Totally

integrated

system

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Some Positioning Guidelines

1. A good positioning has …• A “foot in the present” & • A “foot in the future”

2. Evaluate POP & PODs according to:• Desirable (consumer)• Deliverable (company)• Differentiating (competition)

3. Identify crucial POP’s• Role play competitor’s positioning• Surface & resolve potential consumer trade-offs

• Assess negative correlations & decision-making styles

4. Ensure duality• Rational (“Head”)• Emotional (“Heart”)

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2. Brand Resonance Model Kevin Lane Keller (2001), “Building Customer-Based Brand

Equity: A Blueprint for Creating Strong Brands,” Marketing Management, July/August, 15-19.

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Create Brand Resonance with Customers

Challenge is to ensure customers have the right types of experiences to create the right brand knowledge

Building a strong brand involves a series of steps as part of a “branding ladder”

A strong brand is also characterized by a logically constructed set of brand “building blocks.”

BRAND RESONANCE PYRAMID

RELATIONSHIPS:What about you & me?

RESPONSE:What about you?

MEANING:What are you?

IDENTITY:Who are you?

Intense,Active Loyalty

Positive,AccessibleReactions

Points-of-Parity& Difference

Deep, BroadBrand

Awareness

Resonance

Judgments Feelings

Performance Imagery

Salience

Stages of Brand Development

Branding Objective at Each Stage

1

2

3

4

Building Blocks

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Brand Resonance Pyramid Terminology

Salience Depth and breadth of brand awareness

Recognition and recall at purchase and consumption

Performance What the brand does to meet customers' more functional needs.

Brand performance refers to the intrinsic properties of the brand in terms of inherent product benefits.

Imagery How people think about a brand abstractly rather than what they

think the brand actually physically does. Brand imagery is thus more extrinsic properties of the brand.

Four important intangible dimensions are: Type of user

Brand personality

History & heritage

Experiences

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Brand Resonance Pyramid Terminology

Judgments Customers overall brand evaluations

How customers combine performance and imagery associations to form different kinds of brand opinions

Feelings Customers emotional responses and

reactions to the brand

Can be mild or intense; positive or negative; or experiential or enduring in nature.

Can also relate to the social currency evoked by the brand.

Dimensions of Brand Feelings

Brand feelings can be divided into two broad categories:

Experiential – immediate, short-lived during purchase/consumption

Enduring – private, possibly part of day-to-day life

Brands should have one, or ideally both, types of feelings

Experiential Feelings

• Warm

• Fun

• Exciting

Increasing

level of

intensity

Enduring Feelings

• Sense of Security (Inner-directed)

• Social Approval (Outer-directed)

• Self-Respect (Actualization)

Self-Respect

Sense of Security Social Approval

Inner-Directed Outer-Directed

Higher

level of

values &

needs

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Brand Resonance Pyramid Terminology

Resonance The extent to which customers feel that

they are “in synch” with the brand

Intensity or depth of the psychological bond that customers have with the brand

Level of activity engendered by this loyalty

Repeat purchase rates

The extent to which customers seek out brand information, events, or other loyal customers

Etc.

Sub-Dimensions of Brand Resonance Pyramid

RESONANCE

LOYALTY

ATTACHMENT

COMMUNITY

ENGAGEMENT

JUDGMENTS

QUALITY

CREDIBILITY

CONSIDERATION

SUPERIORITY

FEELINGS

WARMTH

FUN

EXCITEMENT

SECURITY

SOCIAL APPROVAL

SELF-RESPECT

SALIENCE

CATEGORY IDENTIFICATION

NEEDS SATISFIED

PERFORMANCE

PRIMARY CHARACTERISTICS &

SECONDARY FEATURES

PRODUCT RELIABILITY,

DURABILITY & SERVICEABILITY

SERVICE EFFECTIVENESS,

EFFICIENCY, & EMPATHY

STYLE AND DESIGN

PRICE

IMAGERY

USER PROFILES

PURCHASE & USAGE

SITUATIONS

PERSONALITY &

VALUES

HISTORY, HERITAGE,

& EXPERIENCES

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Brand Resonance Model:Brand Building Implications

1. Customers own brands

2. Don’t take shortcuts with brands

3. Brands should have a duality• Performance & imagery

• Judgments & feelings

4. Brand should have a richness

5. Brand resonance provides important focus

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3. Brand Value Chain Model Kevin Lane Keller and Don Lehmann (2003), “How Do

Brands Create Value,” Marketing Management, May/June, 26-31.

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Marketing

Program

Investment

Customer

MindsetMarket

Performance

Shareholder

Value

- Product

- Communications

- Trade

- Employees

- Other

- Awareness

- Associations

- Attitudes

- Attachment

- Activity

- Price premiums

- Price elasticities

- Cost savings

- Expansion success

- Market share

- Profitability

- Stock price

- P/E ratio

- Enterprise value

- Market capitalization

Brand Value Chain

Brand Value Chain

Program

Quality

Marketing

Program

Investment

Customer

Mindset

Market

Performance

Shareholder

ValueVALUE

STAGES

- Product

- Communications

- Trade

- Employee

- Other

- Awareness

- Associations

- Attitudes

- Attachment

- Activity

- Price premiums

- Price elasticities

- Market share

- Expansion success

- Cost savings

- Profitability

- Stock price

- P/E ratio

- Market capitalization

Marketplace

ConditionsMULTIPLIERS

- Relevance

- Distinctiveness

- Consistency

- Cohesiveness

- Competitive reactions

- Channel support

- Customer size and profile

- Market dynamics

- Growth potential

- Risk profile

- Brand contribution

Investor

Sentiment

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Three helpful brand planning models are: Competitive brand positioning model

Points-of-parity & points-of-difference

Brand resonance model Six building blocks: Salience, Performance, Imagery,

Judgments, Feelings, & Resonance

Brand Value Chain Value stages & multipliers

These models can be used … Qualitatively to guide & interpret possible marketing

actions Quantitatively to measure marketing effects

Conclusions

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Thank You!