Chap 2, customer based brand equity

35
. . . . . . . . . . . . . . . . . . . . . . . . . . . . Brand management Prepared by PROF. RAJESH KUMAR (MBA IMT- Ghaziabad, SIX-SIGMA BLACK BELT CERTIFIED) (Prof. of Marketing, Digital Marketing, Strategic Management, Advertisement & Branding) IMT-CDL(DIMS) IP UNIVERSITY (Ex. HOD-MARKETING,BSD) Sr. Manager (Digital Marketing-SEO, SMO, Advt, E-Mail Mrkt, Mobile Mrkt) www.jrinfotech.com E:[email protected] P:9810275444 www.marketingandbrandingguru.com

description

This slide is

Transcript of Chap 2, customer based brand equity

Page 1: Chap 2, customer based brand equity

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

Brand managementPrepared by

PROF. RAJESH KUMAR(MBA IMT- Ghaziabad, SIX-SIGMA BLACK BELT CERTIFIED)

(Prof. of Marketing, Digital Marketing, Strategic Management, Advertisement & Branding)

IMT-CDL(DIMS)IP UNIVERSITY

(Ex. HOD-MARKETING,BSD)Sr. Manager (Digital Marketing-SEO, SMO, Advt, E-Mail Mrkt, Mobile Mrkt)

www.jrinfotech.comE:[email protected]

P:9810275444www.marketingandbrandingguru.com

Page 2: Chap 2, customer based brand equity

.

.

Page 3: Chap 2, customer based brand equity

.

.

Customer-Based Brand Equity

Customer Based Brand Equity:

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

Page 4: Chap 2, customer based brand equity

.

.

Customer-Based Brand EquityThere are three ingredients of Brand Equity

Differential effect • Differences in consumer response

Brand knowledge • A result of consumers’ knowledge about the brand

Consumer response to marketing • Choice of a brand • Recall of copy points from an ad • Response to a sales promotion• Evaluations of a proposed brand extension

Page 5: Chap 2, customer based brand equity

.

.

.

.

Brand Equity

Awareness

Brand Awareness

Brand Image / Brand salience

Brand Experiences /Brand Users

Brand loyalty

Page 6: Chap 2, customer based brand equity

.

.

Brand Equity as a “Bridge”

Brand as a reflection of past investments in the marketing

Brand as a direction for future marketing actions or programs

Page 7: Chap 2, customer based brand equity

.

.

Page 8: Chap 2, customer based brand equity

.

.

Making a Brand Strong: Brand Knowledge

Brand knowledge is the key to creating brand equity.

Brand knowledge consists of a brand node in memory with a variety of associations linked to it.

It has two components: • Brand Awareness• Brand Image

Page 9: Chap 2, customer based brand equity

.

.

Component of Brand Knowledge/Source of Brand Equity

Brand AwarenessIt consists the performance of brand recognition

& brand recall

• Brand Recognition: Ability of consumer to confirm prior exposure to the brand when given brand as a cue

• Brand Recall: Ability of consumer to retrieve the brand from memory when given product category as cue

Page 10: Chap 2, customer based brand equity

.

.

•Brand recognition / Equity

•Brand Preference / Loyalty

•Brand Insistence__________________

•Brand Awareness

•Brand Association

Page 220

Page 11: Chap 2, customer based brand equity

..

Brand Awareness AdvantagesLearning advantages

Register the brand in the minds of consumers

Consideration advantagesLikelihood that the brand will be a member of the

consideration set

Choice advantages Affect choices among brands in the consideration

set

Page 12: Chap 2, customer based brand equity

.

.

Establishing Brand Awareness

Increasing the familiarity of the brand through repeated exposure (for brand recognition)

Forging strong associations with the appropriate product category or other relevant purchase or consumption cues (for brand recall)

Page 13: Chap 2, customer based brand equity

.

.

Component of Brand Knowledge/Source of Brand Equity

Brand image A positive image is created by marketing

programs that link strong, favorable, & unique associations to the brand in memory

• Strength of Brand Association• favorability of Brand Association• uniqueness of Brand Association

Page 14: Chap 2, customer based brand equity

.

.

Creating a Positive Brand Image

Brand Associations• Does not matter which source of brand association• Need to be favorable, strong, and unique• Marketers should recognize the influence of these

other sources of information by both managing them as well as possible and by adequately accounting for them in designing communication strategies.

Page 15: Chap 2, customer based brand equity

.

.

The Four Steps of Brand Building

1. Ensure identification of the brand with customers and an association of the brand in customers’ minds

2. Establish the totality of brand meaning in the minds of consumers

3. Elicit the proper customer responses to the brand identification and brand meaning

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

Page 16: Chap 2, customer based brand equity

.

.

Four Questions Customers ask of Brands

1. Who are you? (brand identity)

2. What are you? (brand meaning)

3. What about you? What do I think or feel 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)

Page 17: Chap 2, customer based brand equity

.

.

Brand Resonance Pyramid

Page 18: Chap 2, customer based brand equity

.

.

Customer-Based Brand Equity Pyramid

Brand SalienceBrand awareness

FeelingJudgment

Brand ImageryBrand Performance

Resonance

Brand Relationship(What about you and me?)

Brand response(What about you?)

Brand Meaning(what are you?)

Brand Identity(Who are you?)

Page 19: Chap 2, customer based brand equity

.

.

Customer-Based Brand Equity Pyramid

Category identification

Warm, secureFun, excitementSocial approval, etc.

QualityCreditability

Superiority

Profiles, usage,Personality & valuesExperiences

Product characteristicsEffectiveness, Reliability

Design ,price

LoyaltyCommitmentEngagement

Brand Relationship(What about you and me?)

Brand response(What about you?)

Brand Meaning(what are you?)

Brand Identity(Who are you?)

Page 20: Chap 2, customer based brand equity

.

.

Salience Dimensions

• Depth of brand awareness– Ease of recognition and recall– Strength and clarity of category membership

• Breadth of brand awareness– Purchase consideration– Consumption consideration

Page 21: Chap 2, customer based brand equity

.

.

Depth and Breadth Importance

• The product category hierarchy shows us not only the depth of awareness matters but also the breadth.

• The brand must not only be top-of-mind and have sufficient “mind share,” but it must also do so at the right times and places.

Page 22: Chap 2, customer based brand equity

.

.

Product Category Structure

• To fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory.

Page 23: Chap 2, customer based brand equity

.

.

Performance Dimensions

• Primary characteristics and supplementary features

• Product reliability, durability, and serviceability

• Service effectiveness, efficiency, and empathy

• Style and design

• Price

Page 24: Chap 2, customer based brand equity

.

.

Imagery Dimensions• User profiles

Demographic and psychographic characteristicsActual or aspirationalGroup perceptions—popularity

• Purchase and usage situationsType of channel, specific stores, ease of purchaseTime (day, week, month, year, etc.), location, and context of usage

• Personality and valuesSincerity, excitement, competence, sophistication, and ruggedness

• History, heritage, and experiencesNostalgiaMemories

Page 25: Chap 2, customer based brand equity

.

.

Judgment Dimensions

• Brand quality Value Satisfaction

• Brand credibility Expertise Trustworthiness Likeability

• Brand considerationRelevance

• Brand superiorityDifferentiation

Page 26: Chap 2, customer based brand equity

.

.

Feelings Dimensions

• Warmth• Fun• Excitement• Security• Social Approval• Self-respect

Page 27: Chap 2, customer based brand equity

.

.

Resonance Dimensions • Behavioral loyalty– Frequency and amount of repeat purchases

• Attitudinal attachment– Love brand (favorite possessions; “a little pleasure”)– Proud of brand

• Sense of community– Kinship– Affiliation

• Active engagement– Seek information– Join club– Visit website, chat rooms

Page 28: Chap 2, customer based brand equity

.

.

Application:Identify the Key Drivers of Brand Equity

0.17 0.66

0.24

0.65

P-2

P-2

PerformancePerformance

P-1P-1

P-10 P-10

P-7

P-7

P-8P-8

P-9P-9

P-3P-3

P-4P-4

P-6P-6

P-5P-5

P-11 P-11 P-12

P-12

I-2I-2

I-9I-9

ImageryImagery

I-1I-1

I-3I-3

I-6I-6

I-5I-5

I-10 I-10

I-7I-7

I-8I-8

I-11

I-11 I-12

I-12

I-4I-4

F-2

F-2

FeelingsFeelings

F-1F-1

F-3F-3

F-4F-4

F-6F-6

F-5F-5

F-7

F-7

F-8F-8

F-9F-9

F-11 F-11 F-12

F-12

F-10F-10

J-2J-2

JudgmentJudgment

J-1J-1

J-3J-3

J-4J-4

J-6J-6

J-5J-5

J-10J-10

J-7J-7

J-8J-8

J-9J-9

J-11

J-11 J-12

J-12

R-2R-2

ResonanceResonance

R-1R-1

R-3R-3

R-4R-4

R-6

R-6

R-5R-5

R-10 R-10

R-7

R-7

R-8

R-8

R-9R-9

R-11 R-11 R-12

R-12

0.58

0.49

Page 29: Chap 2, customer based brand equity

.

.

Brand Building Implications

• Customers own brands. • Don’t take shortcuts with brands. • Brands should have a duality. • Brands should have richness. • Brand resonance provides important focus.

Page 30: Chap 2, customer based brand equity

.

.

Creating Customer Value

• Customer-brand relationships are the foundation of brand resonance and building a strong brand.

• The customer-based brand equity model certainly puts that notion front and center.

Page 31: Chap 2, customer based brand equity

.

.

Is a company consumer-centric?

1. Is the company looking for ways to take care of you?

2. Does the company know its customers well enough to differentiate between them?

3. Is someone accountable for customers?4. Is the company managed for shareholder value?5. Is the company testing new customer offers and

learning from the results?

Page 32: Chap 2, customer based brand equity

.

.

Customer Relationship Management (CRM)

• Uses a company’s data systems and applications to track consumer activity and manage customer interactions with the company

Page 33: Chap 2, customer based brand equity

.

.

Customer Equity

• Blattberg and Deighton (1996) offer eight guidelines as a means of maximizing customer equity:

– Invest in highest-value customers first– Transform product management into customer management– Consider how add-on sales and cross-selling can increase customer

equity– Look for ways to reduce acquisition costs– Track customer equity gains and losses against marketing programs– Relate branding to customer equity– Monitor the intrinsic retainability of your customer– Consider writing separate marketing plans—or even building two

marketing organizations—for acquisition and retention efforts

Page 34: Chap 2, customer based brand equity

.

.

Customer Equity

• The sum of lifetime values of all customers• Customer lifetime value (CLV) is affected by

revenue and by the cost of customer acquisition, retention, and cross-selling

• Consists of three components:– Value equity– Brand equity– Relationship equity

Page 35: Chap 2, customer based brand equity

.

.

Relationship of Customer Equity to Brand Equity

• Customers drive the success of brands but brands are the necessary touch point that firms have to connect with their customers.

• Customer-based brand equity maintains that brands create value by eliciting differential customer response to marketing activities.

• The higher price premiums and increased levels of loyalty engendered by brands generate incremental cash flows.