Handout CCBE 2013

8/13/2019 Handout CCBE 2013

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Customer Based Brand

EquityBM6611Managing Brands

Lecture 3Francesca DallOlmo Riley


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Readings for Lecture 3

Keller et al. (2012) Strategic BrandManagement Chapter 2

Romaniuk, J. and Gaillard, E. (2007) The

relationship between unique brand associations,brand usage and brand performance: analysisacross eight product categories, Journal ofMarketing Management, 23 (3-4): 267-284.

Romaniuk, J. and Sharp, B. (2003) Measuringbrand perceptions: Testing quantity and quality,Journal of Targeting, Measurement and Analysisfor Marketing, 11 (3): 218-229.


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What is brand equity?


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Lets see an example...

The People versus Coke


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The People versus Coke

Why were the people so upset at theintroduction of new Coke?

What did Coke mean to them?

What did Cokes management fail torealise when they launched new Coke?

Where did they go wrong?


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The Concept of Brand EquityKeller et al.(2012)

The brand equity conceptstresses the importance of the

brand in marketing strategies.

Brand equity = the marketingeffects uniquely attributable tothe brand.


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Interpretations of BrandBrand as a Logo? or

Brand as Adding value?ADDED VALUESCommodity Brand

Brand v. Commodity


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The Concept ofCustomer-Based Brand Equity

Keller et al.(2012) Basic premise:

Power of a brand resides in the minds ofcustomers

Customer-based brand equity

Differential effect

Customer brand knowledge

Customer response to brand marketing


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Determinants ofCustomer-Based Brand Equity

Keller et al.(2012) Customer is awareof and familiarwith the brand

Customer holds some strong, favorable, and

unique brand associationsin memory Challenge is to ensure customers have the right

types of experiences with products & services andtheir marketing programmes to create the right

brand knowledge structures:

ThoughtsFeelings Images

Perceptions Attitudes


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Sources of Customer-BasedBrand Equity:

Brand Knowledge (1)

Brand knowledge is the key to creating

brand equity: creates the differentialeffect that drives brand equity.

Brand knowledge consists of a brandnode in memory with a variety ofassociations linked to it.


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Brand Knowledge (2)The Mental Representations

Model Memory is an associative networkof

interlinked nodes in which each node is aconcept [Associative Network Theory]

The meaning of a concept is given partlyby the links it has with other concepts

Once established, such links may bestrengthened by further experience andinformation


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Concepts that Might BeAssociated with Body Shop

LOral

Specific stores

Anita

Roddick

Good value

Ethical

concerns

Health and

beauty Boots

Body shop company

OpticiansEye tests

Save

money Animal

testing

Global

warming

Smells in stores

Cosmetics

Young

people

Multi-national firms


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Mental Representations: MainPoints

perception activates nodes corresponding to theperceived object

thinking occurs when activated nodes spread activation toother nodes

links between nodes are strengthened slowly over time bysuch activation stronger concepts (relating to more frequently activated

nodes) are more easily retrieved nodes/links are valenced (positive or negative, the basis

for attitude) long-term memory is the single, large associativestructure whereas short-term memory is a currentlyactivated subset

simultaneous activations may occur (parallel processing);

much of this is unconscious See also page 404-406 of textbook


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Brand Knowledge (3)

Brand knowledge has two components:

brand awareness and brand image.

Brand knowledge

Brand image Brand awareness


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Brand Knowledge (4)

Brand awareness:strength of brand

node or trace in memory (consumers canidentify the brand under different conditions)

Brand image: strength of brandassociations held in consumer memory(meaning of the brand for consumers)

Customer brandknowledgea reflection from the past


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Brand

recall

Two Forms of Brand

Awareness

Two forms of brand awareness

Brand recall Brand recognition

Brand knowledge

Brand image Brand awareness

Brand

recognition


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Brand recall

Brand recalloccurs when category,

need or other general stimulus

gets you to think of the brand

Recallis needed more for ..


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Brand recognition

Brand recognitionoccurs when

a brand specific stimulus

(e.g. seeing it on the shelf)

brings the brand to mind

recognitionis needed more for .


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Brand Awareness Advantages

Learning advantages

Register the brand in the minds ofconsumers

Consideration advantages

Likelihood that the brand will be a memberof the consideration set

Choice advantages

Affect choices among brands in theconsideration set

Stronger brands are more easily retrieved

(recall and recognition)


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Establishing Brand Awareness

Increasing the familiarity of the brandthrough repeated exposure (for brand

recognition)

Forging strong associations with the

appropriate product category or otherrelevant purchase or consumption cues(for brand recall)

f d


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Two components of BrandKnowledge(5)

Valence of

nodes

Number of

nodes

Brandattitude

Brandstrength

Brand

recall

Brand

recognition

Strength of

links

Uniqueness

of nodes

Brand knowledge

Brand image Brand awarenessBrand awarenessBrand awareness

Brand

recall

Brand awareness

Brand

recognition

Brand

recall

Brand awareness

Brand

recognition

Brand

recall

Brand awareness

Brand knowledge

Brand

recognition

Brand

recall

Brand awarenessBrand imageBrand imageBrand image

Number of

nodes

Brand image

Uniqueness

of nodes

Number of

nodes

Brand image

Strength of

links

Uniqueness

of nodes

Number of

nodes

Brand image

Brandstrength

Strength of

links

Uniqueness

of nodes

Number of

nodes

Brand image


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Creating a Positive BrandImage

Keller et al.(2012)

Brand Associations Does not matter which source of brand

association

Need to be favorable, strong, and unique.


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Contributions to Brand Strength(but some debate see later on)

Brand

strength

Strength of

links

Uniqueness of

nodes

Number of

nodes

Brand image

Ease of

retrieval

ld


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BuildingCustomer-Based Brand Equity (1)

Keller et al.(2012)

Brand knowledge structures depend on . . .

The initial choices for the brand elements

The supporting marketing programme and themanner by which the brand is integrated into it

Other associations indirectly transferred to thebrand by linking it to some other entities


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BuildingCustomer-Based Brand Equity (2)

Keller et al.(2012)

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.

Identifies areas of strength and weakness Provides guidance to marketing activities


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CUSTOMER-BASED BRAND EQUITY PYRAMID

RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =

What about you & me?

3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?

Stages of brand

development


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Salience Dimensions

Brand Salience measures awareness of thebrand: how often and how easily the brandis evoked under various circumstances

The brand must not only be top-of-mindand have sufficient mind share,but it

must also do so at the right times and

places. Depthof brand awareness

Ease of recognition & recall

Strength & clarity of category membership


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Salience Dimensions

Depthof brand awareness

Ease of recognition & recall

Strength & clarity of category membership

Breadthof brand awareness

Purchase consideration

Consumption consideration

When

WhereHow

often

consumers

think of the

brand


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SALIENCE

PERFORMANCE IMAGERY

4. RELATIONSHIPS =


3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?


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Performance Dimensions

What the brand does to meet customersmore functional needs

Intrinsic properties of the brand in terms of

inherent product benefits: Primary characteristics & supplementary features

Product reliability, durability, and serviceability

Service effectiveness, efficiency, and empathy

Style and design

PriceFunctional appeal:

Gillette razors shave well


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Imagery Dimensions

How people think about a brand abstractlyrather than what they think the brandactually physically does

More extrinsic properties of the brand

Four important tangible dimensions are: Type of User

Personality & values History & heritage Experiences

Symbolic

appeal


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Brand imagery beyond brandperformance dimensions

Core

Product

Aura or

personality

Symbolic

Functional

Functional differences are

narrowing

Images allow the consumer to

understand what and who the

brands represent

Symbolic differences more

sustainable

Unbranded baked beans: fill me up when I am hungry

HEINZ baked beans: make me feel good about myself

and my family (and fill me up)


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SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?


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Judgment Dimensions

Brand qualityValue

Satisfaction

Brand credibility Expertise

Trustworthiness

Likeability

Brand consideration Relevance

Brand superiority

Differentiation

Consumer overall brand evaluationHow consumers combine performance and imageryassociations to form different kinds of brand opinion


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Relevance

British Airways

Excellent service

Reliable

Convenient times

KLM

Excellent service

Reliable

Convenient times

BA is more familiar to me. Im British and BA

is British. Therefore, Ill chooseBA: The

Worlds Favourite Airline


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Feelings Dimensions

Consumers emotional responses andreactions to the brand

Can be mild or intense; positive or negative;

experiential or enduring in nature

Can also relate to the social currency evokedby the brand


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Brands =

Value-expressive devices

We buy brands to say things aboutourselves


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Do they like me?

Do I like myself?


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RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =


3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?


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Resonance Dimensions

Behavioral loyalty

Frequency and amount of

repeat purchases

Attitudinal attachment

Love brand (favoritepossessions; a littlepleasure)

Proud of brand

Sense of community

Kinship

Affiliation

Active engagement

Seek information

Join club

Visit web site, chat rooms

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

A dialog between consumers and the brandBrand as a relationship

I t t ti f B d


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Interpretations of Brand

Brand as a relationship

Benefits of


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Benefits ofCustomer-Based Brand Equity

A strong brand:

Enjoys greater brand loyalty, usage, and affinity

Is less vulnerable to competitors marketingactions

Commands larger price premiums

Receives greater trade cooperation & support

Makes marketing communication more effective

Yields licensing opportunities

Supports brand extensions.


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Customer-Based Brand Equity Model

Consumer-

Brand

Resonance

Brand Salience

Consumer

Judgments

Consumer

Feelings

Brand

PerformanceBrand

Imagery

INTENSE, ACTIVE

LOYALTY

RATIONAL &

EMOTIONAL

REACTIONS

POINTS-OF-

PARITY &POINTS-OF-

DIFFERENCE

DEEP, BROAD

BRAND

AWARENESS

Branding objectives

at each stage

Brands as

relationship builders.


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However


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The problem with CBBE is...

Brand

strength

Strength of

links

Uniqueness

of nodes

Number of

nodes

Brand imageThere is evidence that the number of

nodes builds brand strength

(Romaniuk and Gaillard, 2007;

Romaniuk and Sharp, 2003)Evidence does not show that

uniqueness relates to brand strength

(Romaniuk and Gaillard 2007)

Ease of

retrieval

R di f L t 4


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Readings for Lecture 4

Keller et al. (2012) Strategic Brand ManagementChapter 3

Ehrenberg, A.S.C. (1993) If you are so strong,why arent you bigger?,Admap, 28 (333 -

October): Ehrenberg, A.S.C., Uncles, M. and G. Goodhardt

(2004) Understanding Brand PerformanceMeasures: Using Dirichlet Benchmarks, Journalof Business Research, 57 (12): 1307-1325.

Romaniuk, J. and Sharp, B. (2004)Conceptualising and Measuring Brand salience,

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