Chap02=Marcom & Brand Equity

8/9/2019 Chap02=Marcom & Brand Equity

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MARCOM CHALLENGES:MARCOM CHALLENGES:Enhancing Brand Equity,Enhancing Brand Equity,

Influencing Behaviour and BeingInfluencing Behaviour and Being

AccountableAccountable


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1. Explain the concept of brand equity from both the

companys and the customers perspectives.

2. Describe the positive outcomes that result from

enhancing brand equity.

3. Appreciate a model of brand equity from the

customers perspective.

4. Understand how marcom efforts must influencebehavior and achieve financial accountability..

Chapter Objectives

After reading this chapter you should be able to:

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Introduction:Introduction:

Framework for Marcom ProcessFramework for Marcom Process

Fundamental

Decisions

Desired

OutcomesImplementation

Decisions

Evaluation and

Corrective Action


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Basic IMC IssuesBasic IMC Issues

How to enhance

brand equity

How to affect

customer

behavior

How to justify

marcom

investments

How to

demonstrate

financial

accountability

Marketing

Communicators


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BrandBrand

BrandBrand IIs a name, term, sign, symbol, or design.s a name, term, sign, symbol, or design.

Identifies and differentiates goods and services of oneIdentifies and differentiates goods and services of one

seller or group of sellers from those of theseller or group of sellers from those of the

competition.competition.Communicates a particular set of values.

Brand EquityCan be considered either from the perspective of the

organization that owns it or from the vantage point oft or from the vantage point of

the customer.the customer.

Is valuable when consumers believe the brand canIs valuable when consumers believe the brand can

deliver on its promises.deliver on its promises.


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A FirmA Firm--Based Perspective on Brand EquityBased Perspective on Brand Equity

Higher

market share

Increased

brand loyalty

Premium

pricing

Revenue

premiums

Effects of Brand

Equity Increases


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Brand Equity IncreasesBrand Equity Increases

Revenue Premium The revenue differential between a branded item and

a corresponding private labeled item.

Revenue premium for a branded item (b) compared toa private label (pl) =

(volumeb)(priceb) (volumepl)(pricepl)


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Source:Adapted from Kevin Lane Keller, Conceptualizing, Measuring, and Managing

Customer-Based Brand Equity, Journal of Marketing57 (January 1993), 7.

A Customer-Based Brand Equity

Framework


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The Brand Awareness Pyramid

Source: David A. Aaker, Managing Brand Equity(New York: Free Press, 1991), 62.


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Forms ofBrand KnowledgeForms ofBrand Knowledge

Brand AwarenessWhether a brand name comes to mind when

consumers think about a particular product category

The ease with which the name is evoked

Brand Image The types of associations that come to the

consumers mind when contemplating a particular

brand

Top-of-Mind Awareness (TOMA)Occurs when a brand is the first brand that

consumers recall when thinking about brands in a

particular product category.


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Brand AssociationsBrand Associations

Positive

Attributes

Perceived

Benefits

Favorable

Attitude

Brand image

associations that

build brand equity


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Dimensions ofBrand PersonalitiesDimensions ofBrand Personalities

Excitement

Sincerity

RuggednessSophistication

Competence


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Ways of Enhancing Brand EquityWays of Enhancing Brand Equity

Speak-for-Itself Message-Driven Leveraging

Enhancing Brand

Equity


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Leveraging Brand Meaning from Various Sources

Source: Kevin Lane Keller, Brand Synthesis: The Multidimensionality ofBrand Knowledge,

Journal of Consumer Research 29 (March 2003), 598. By permission of the University of Chicago Press.


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Types ofBranding for LeveragingTypes ofBranding for Leveraging

CoCo--BrandingBranding

A partnership between two brandsA partnership between two brands

Ingredient BrandingIngredient Branding

Inclusion of one brand within the otherInclusion of one brand within the other


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What Benefits Result from EnhancingWhat Benefits Result from Enhancing

Brand Equity?Brand Equity?

Increased consumer loyaltyIncreased consumer loyalty

LongLong--term growth and profitability for theterm growth and profitability for the

brandbrand

Maintain brand differentiation fromMaintain brand differentiation from

competitive offeringscompetitive offerings

Insulate brand from price competitionInsulate brand from price competition


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Measuring WorldMeasuring World--Class BrandsClass Brands

Quality Salience Equity

Evaluating

World-Class Brands


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Characteristics of a WorldCharacteristics of a World--Class BrandClass Brand

Delivers benefitsconsumers want

Stays relevant

Price equals value

Good positioning

Consistency

Fits into brand portfolio

Brand helps build brandequity

Brands managers

understand what the

brand means toconsumers

Support over long run

Monitoring of the sources

of brand equity


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Interbrands Top 20 Global Brands, 2007

Source: Interbrand Report, Best Global Brands 2007, http://www.interbrand.com/best_brands_2007.asp.


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Affecting Behavior and AchievingAffecting Behavior and Achieving

Marcom AccountabilityMarcom Accountability

The Importance ofBrand Awareness

Creating brand awareness and boosting brand image

serve little positive effect unless individuals make

purchases or engage in desired behaviors

Marcoms objective is ultimately to affect sales

volume and revenue


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Measuring Marketing InvestmentMeasuring Marketing Investment

PerformancePerformance

Return on Marketing Investment (ROMI)

Measures the effect of marcom, or of its specific

elements such as advertising, in terms of whether it

generates a reasonable revenue return on themarcom investment

Why Measure Marcom Effectiveness?

Demands for greater accountability on the marketing

function To become better at marcom activities


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Measuring Marketing InvestmentMeasuring Marketing Investment

PerformancePerformance

Difficulties in Measuring MarcomDifficulties in Measuring Marcom

EffectivenessEffectiveness

Choosing an appropriate metricChoosing an appropriate metric

Gaining agreement on measuresGaining agreement on measures

Collecting accurate data for marcom assessmentCollecting accurate data for marcom assessment

Determining effects of specific marcom elementsDetermining effects of specific marcom elements


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Effectiveness: Choosing a MetricEffectiveness: Choosing a Metric

Change in

brandawareness

Improvement

in attitudestoward

the brand

Increased

purchaseintentions

Larger salesvolume

What to Measure?


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Effectiveness: Gaining AgreementEffectiveness: Gaining Agreement

Finance Departments

Measures of Success:

Discounted cashflows

Net present values of

investment decisions

Marketing

Departments

Measures of Success:

Measures of brand

awareness, image,

and equity


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Effectiveness: Collecting Accurate DataEffectiveness: Collecting Accurate Data

and Calibrating Special Effectsand Calibrating Special Effects

What exact sales figures should be used to

calculate sales?

How much relative effect does each program

element have on sales volume compared to

the effect of other elements?


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Measuring Marcom EffectivenessMeasuring Marcom Effectiveness

MarketingMarketing--Mix ModelingMix ModelingEmploying econometric statistical techniques toEmploying econometric statistical techniques to

estimate the effects that elements of the marcom mixestimate the effects that elements of the marcom mix

have in driving sales volume.have in driving sales volume.

Example:Example:

Chap02=Marcom & Brand Equity

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