BUILDING, MEASURING, AND MANAGING BRAND EQUITY

Welcome to Strategic Brand Management

#BU692u Strategic Brand Management Spring 2005#Agenda First ClassCourse ObjectivesClass FormatPerformance EvaluationIntroduction to Branding#Course ObjectivesUnderstanding of what a brand is and how it is formedBrand building in a variety of business contextsIntegrated requirements for brand building, reinforcement, & revitalizationModels, measures, & impact of brand equityLearn through illustration & application#Class FormatDiscuss key concepts you & meIllustrate their application you, me, & guestsQuestions for discussion tasks to be performed from outline Challenges, issues, & trendsSummarize#Performance EvaluationBrand Audit Project (group) 40%Brand Personality Assessment (individual) 20%Brand Journal (individual) 20%Participation (individual) 20% #Brand Audit Project Brand BookBrand HistoryAssessment of current status using course concepts brand hierarchy, customer-based brand equity, brand positioning, brand mantraAnalyses of how branding elements and marketing mix are contributing to this brand statusRecommendations re: building & managing brand equity in the futureBrand choice 2nd class April 23rdPresentation last class June 24th/25th#Brand Personality AssessmentCapturing a brands personalityApply Aakerss brand personality scaleProjective techniques to create an image for your brandUse Zaltmans ZMET technique to create a collage for your brandUse Fourniers typology to describe the relationship that you have with your selected brandImplications from abovePowerpoint presentation (5 slides) May 6th/7th session#Example of a Brand Personality Assessment Zehrs#zehrs Brand PersonalityBu692u Rick BeutlerBackground Kitchener, 1950: Zehrs father & sons began family market focused on superior customer service, value, and quality acquired by Loblaw Companies in 1963 currently 58 stores in Southern Ontario

Slogan, Mantra The best of everything you need

Value Proposition Zehrs sells quality products and services that provide good value at a low price for its customers; expects to continue to be known as low cost operator through innovative and customer orientated actions; expects honesty and integrity dealing with customers, employees, suppliers, and community.

#Aakers Brand Personality Scale (like McDonalds)sincerity, competence, and sophisticationX excitement, and ruggedness

Projective Techniques (Golden Lab)animal (dog); activity (routine eating); fabric (natural cotton)music (mainstream top 40); vehicle (minivan); occupation(management); TV show (Everybody Loves Raymond)

Fourniers Typology (Courtship/Compartmentalized Friendship)Interdependence committed; Self Concept engaged;Commitment engaged; Love/Passion engaged;Intimacy engaged; Partner Quality -- committed

#zehrs ZMET Collage

Boring, daily errand

Availability, costs a bit more

Strong presence in Community

Friendly service

Convenient, not just foodMost Representative:High value, one-stop shopping for people on the go

Quality, healthy food

Celebration, Family & Friends

Private and national brands, value priced

Active, suburban families#zehrs Application to CBBE PyramidRESONANCE LOYALTY (F)ATTACHMENT (F)COMMUNITY (Z)ENGAGEMENT (F)JUDGEMENTSQUALITY (Z)CREDIBLE (A, F)CONSIDER (Z)SUPERIORITY (A, Z)FEELINGS WARMTH (Z)X FUN (Z)X EXCITEMENT (Z)SECURITY (A, P)SOCIAL APPROVAL(P,Z)SELF-RESPECT (F)SALIENCE: DEPTH OF BRAND, RECALL & CATEGORY ID (A, F, P, Z)BREADTH OF BRAND, NEEDS SATISFIED (A, F, P, Z)PERFORMANCE PRIMARY CHARACTERISTICS &SECONDARY FEATURESPRODUCT RELIABLE, DURABLE & SERVICEABLE (A, F, Z)SERVICE EFFECTIVE, EFFICIENTY, & EMPATHETIC (A, Z )STYLE AND DESIGN (P, Z)XPRICE (Z)IMAGERY? PROFILES (P, Z)PURCHASE & USAGE SITUATIONS(F, Z)PERSONALITY & VALUES (A, P)HISTORY,EXPERIENCE (F, Z)SYMBOLS: = Mid To High ScoreX = Below Mid Score? = Not Enough DataABBREVIATIONS:A = AakerF = FournierP = Projective Z = ZMET#Implications to Build & Enhance zehrs Brand EquityGoalWeakness To DoAchieve all level in CBBE PyramidImagery; ProfilesPerformance;PriceFeelings; Fun & ExcitementCarefully develop & assess integrated marketing plan to address weaknesses while retaining strengths, since scores well overall. Revise value proposition & mantra re target segment, PoP, PoD.Imagery -- ProfilesSurveyed only medium to high income individuals and families Conduct quantitative market survey of primary and secondary target seg-ments to validate findings regarding demographics, income levels, etc.Performance Quality & Service at Low PricePerceived value proposition is pay higher price for quality & serviceSurvey target segments to determine what perceived price level erodes brand equity. Target consumers may accept value rather than low price.Feelings Fun & Excitement

Perception is boring, errand, life necessityAdd treasure hunt appeal, e.g.. High profile short term special merchandise buys, vendor sponsored contests, etc.#Brand Journal10 or more articles that address topic of brandingConcept illustrated in the article and its implications for marketers a crisp paragraph for each articleArticles can be discussed through the termJournal to be submitted June 18th#ParticipationClass discussionsJournal examplesInteraction with guest speakersValue added contributions#Questions for DiscussionWhat is a brand? How is it formed?Can anything be branded? Are you a brand?How does branding affect consumer behaviour?What are the challenges to branding in todays marketplace and what are the implications for marketers?

#What is a Brand?Traditional view - A brand is a name, term, sign, symbol, or design which is intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.More recent viewsBrand is what is experienced and valued by customers in everyday social life.Brand is the culture of the product shared taken for-granted brand stories, images, and associationsBrand is the mental and emotional file we have for a product or service or entity.#12: Managing a Brand Image through MarketingA brand is a living entity and it is enriched or undermined cumulatively over time, the product of a thousand small gestures.

Michael Eisner, CEO Disney

#

1971

For a fee of $35, the Swoosh trademark was created by a graphic design student named Carolyn Davidson.#Before Nike there were sneakers.

#Before Coca-Cola there were soft drinks.

#

Before STARBUCKS there werecoffee shops.

#Before Microsoft there weresoftware applications.

#Before Nokia there werecell phones.

#Catalysts for Branding - InterbrandNew offering, new promiseStrong, nimble competitionSophisticated, savvy & demanding customersPrice & margin pressuresSales & market share pressuresCombinations & divestituresOrganic growthNew revenue streamsShare price performanceEmployee attraction, retention, & productivity#New Branding Challenges Brands are important as everConsumer need for simplificationConsumer need for risk reductionBrand management is as difficult as everSavvy consumersIncreased competitionDecreased effectiveness of traditional marketing tools and emergence of new marketing toolsComplex brand and product portfolios#Brand Explosion

#Branding by Retailers Example: Walmarts 5 Next Victims Forbes 11/12/2004Consumer Electronics Best Buy #1, Walmart #2 but recently rolled out private brand ILO., expanded brand relationships with Sony, RCA, PanasonicBanking trying to get into banking but thwarted by regulators, instead it offers check cashing, bill payment, & money orders & boasts 28 Wal-Mart Money Centres operated by Sun Trust Banks plus it has I-store bank branches with other banksPharmacy currently 4th in pharmacy business, rolling out a handful of 24hr pharmaciesGasoline 1555 stations on Wal-Mart properties, 300 of which are operated by Sams Club, rest by MurphyFashion bought #1 selling British apparel brand George from Asda, licenses Mary-Kate & Ashley lines from the Olsen twins#Fit for PurposeSame as for LessPremium QualityQuality D 04 Cleaners & Paper GoodsD 46 Pharmacy / OTCD 02 HBCD 82 ImpulseLicensePrivate BrandNational BrandNecessities Brand PortfolioD 07 PetsPremium National BrandSams ChoiceEverActiveOl RoyGreat ValueEquateEquate National BrandSpecial Kitty#

RegionalBrands

GourmetPresidents ChoiceKraftHeinz No NameBranded Value-Added Chain#The Customer/Brand ChallengeIn this difficult environment, marketers must have a keen understanding of:customersbrandsthe relationship between the two#The Concept of Brand EquityThe brand equity concept stresses the importance of the brand in marketing strategies.Brand equity is defined in terms of the marketing effects uniquely attributable to the brand.Brand equity relates to the fact that different outcomes result in the marketing of a product or service because of its brand name, as compared to if the same product or service did not have that name.

#6Auto Example

#The Concept of Customer-Based Brand EquityCustomer-based brand equityDifferential effectCustomer brand knowledgeCustomer response to brand marketing#12 the publics perception

#Determinants of Customer-Based Brand EquityCustomer is aware of and familiar with the brandCustomer holds some strong, favorable, and unique brand associations in memory#14Customer-Based Brand Equity ModelConsumer-BrandResonanceBrand SalienceConsumer JudgmentsConsumer FeelingsBrandPerformanceBrandImageryINTENSE, ACTIVE LOYALTYRATIONAL & EMOTIONAL REACTIONSPOINTS-OF-PARITY & POINTS-OF-DIFFERENCEDEEP, BROAD BRAND AWARENESS#In which product categories to you exhibit strong brand loyalty? Why?#Lovemarks Love/Respect AxisLove Mystery, Sensuality, IntimacyRespect Performance, Trust, ReputationProducts Low Love, Low RespectFads High Love, Low RespectBrands Low Love, High RespectLovemarks High Love, High respect#How to put Love in your BrandFind your most passionate customers and listen to themPut your brand through the love-respect axisStart telling stories show your brand as part of an experience, a myth, or a dream#Building Customer-Based Brand EquityBrand knowledge structures depend on . . .The initial choices for the brand elements The supporting marketing program and the manner by which the brand is integrated into itOther associations indirectly transferred to the brand by linking it to some other entities#19Examples?#Benefits of Customer-Based Brand EquityEnjoy greater brand loyalty, usage, and affinityCommand larger price premiumsReceive greater trade cooperation & supportIncrease marketing communication effectivenessYield licensing opportunitiesSupport brand extensions.#15Brand Power Global Business Week, August 2004

#The continuously strong rise of Samsungs brand value reflects the companys commitment to invest in its brand on a global scale and make brand value a key corporate target throughout the organization, including the CEO and all employees.

-Jan Lindemann, Global Managing Director of Interbrand

#Brand Value in 2003= US $10.8 billion

(31% increase from 2002)A result of making brand building the key focus in their marketing strategy

#Brand Power - Canada

#Customer-Based Brand Equityas a BridgeCustomer-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 to future marketing activities#77The Key to BrandingFor branding strategies to be successful, consumers must be convinced that there are meaningful differences among brands in the product or service category.Consumer must not think that all brands in the category are the same.PERCEPTION = VALUE#17Strategic Brand ManagementStrategic brand management involves the design and implementation of marketing programs and activities to build, measure, and manage brand equity. The strategic brand management process is defined as involving four main steps:1) Identifying and establishing brand positioning and values2)Planning and implementing brand marketing programs3)Measuring and interpreting brand performance4)Growing and sustaining brand equity#Strategic Brand Management ProcessMental mapsCompetitive frame of referencePoints-of-parity and points-of-differenceCore brand valuesBrand mantraMixing and matching of brand elementsIntegrating brand marketing activitiesLeveraging of secondary associations

Brand Value ChainBrand auditsBrand trackingBrand equity management systemBrand-product matrixBrand portfolios and hierarchiesBrand expansion strategiesBrand reinforcement and revitalizationKEY CONCEPTSSTEPSGrow and SustainBrand EquityIdentify and EstablishBrand Positioning and ValuesPlan and Implement Brand Marketing ProgramsMeasure and InterpretBrand Performance#1Strategic Brand Management Session2: Building Brand EquityCustomer-based brand equitySix brand building blocks brand salience, brand performance, brand imagery, brand judgments, brand feelings, & brand resonanceBuilding strong brands advantagesBrand positioning & its role in building brand equityInternal brandingBrand valuesBrand mantra

#Questions for DiscussionCustomer-based brand equity & its advantages?Two pairs of brands sources of brand equity & implications?Points of parity? Points of difference? Implications for positioning?Brand resonance which brands? Why? Implications?Beverage category?Brand mantra for one of your favourite brands?

#Motivation forCustomer-Based Brand Equity ModelMarketers know strong brands are important but arent always sure how to build one.CBBE model was designed to be comprehensive cohesive well-grounded up-to-dateactionable#Rationale of Customer-Based Brand Equity ModelBasic premise: Power of a brand resides in the minds of customersChallenge is to ensure customers have the right types of experiences with products & services and their marketing programs to create the right brand knowledge structures:ThoughtsFeelingsImagesPerceptionsAttitudes

#Building Customer-Based Brand EquityBuilding a strong brand involves a series of steps as part of a branding ladderA strong brand is also characterized by a logically constructed set of brand building blocks.Identifies areas of strength and weaknessProvides guidance to marketing activities#CUSTOMER-BASED BRAND EQUITY PYRAMIDRESONANCESALIENCEJUDGMENTSFEELINGSPERFORMANCEIMAGERY4. RELATIONSHIPS = What about you & me?3. RESPONSE = What about you?2. MEANING = What are you?1. IDENTITY = Who are you?#Salience DimensionsDepth of brand awarenessEase of recognition & recallStrength & clarity of category membershipBreadth of brand awarenessPurchase considerationConsumption consideration#Performance Dimensions Primary characteristics & supplementary featuresProduct reliability, durability, and serviceabilityService effectiveness, efficiency, and empathyStyle and designPrice#23Imagery DimensionsUser profilesDemographic & psychographic characteristicsActual or aspirationalGroup perceptions -- popularityPurchase & usage situationsType of channel, specific stores, ease of purchaseTime (day, week, month, year, etc.), location, and context of usagePersonality & valuesSincerity, excitement, competence, sophistication, & ruggednessHistory, heritage, & experiencesNostalgiaMemories

#Judgment DimensionsBrand qualityValueSatisfactionBrand credibilityExpertiseTrustworthinessLikabilityBrand considerationRelevanceBrand superiorityDifferentiation

#Feelings DimensionsWarmthFunExcitementSecuritySocial approvalSelf-respect#Resonance Dimensions Behavioral loyaltyFrequency and amount of repeat purchasesAttitudinal attachmentLove brand (favorite possessions; a little pleasure)Proud of brandSense of communityKinshipAffiliationActive engagementSeek informationJoin clubVisit web site, chat rooms

#Customer-Based Brand Equity ModelConsumer-BrandResonanceBrand SalienceConsumer JudgmentsConsumer FeelingsBrandPerformanceBrandImageryINTENSE, ACTIVE LOYALTYRATIONAL & EMOTIONAL REACTIONSPOINTS-OF-PARITY & POINTS-OF-DIFFERENCEDEEP, BROAD BRAND AWARENESS#Sub-Dimensions of CBBE PyramidLOYALTYATTACHMENTCOMMUNITYENGAGEMENTQUALITY CREDIBILITYCONSIDERATIONSUPERIORITYWARMTHFUNEXCITEMENTSECURITYSOCIAL APPROVALSELF-RESPECTCATEGORY IDENTIFICATIONNEEDS SATISFIEDPRIMARY CHARACTERISTICS &SECONDARY FEATURESPRODUCT RELIABILITY, DURABILITY & SERVICEABILITYSERVICE EFFECTIVENESS, EFFICIENCY, & EMPATHY STYLE AND DESIGN PRICEUSER PROFILESPURCHASE & USAGE SITUATIONSPERSONALITY & VALUESHISTORY, HERITAGE, & EXPERIENCES#Application:Identify the key drivers of brand equity0.170.660.240.65P-2PerformanceP-1P-10P-7P-8P-9P-3P-4P-6P-5P-11P-12I-2I-9ImageryI-1I-3I-6I-5I-10I-7I-8I-11I-12I-4F-2FeelingsF-1F-3F-4F-6F-5F-7F-8F-9F-11F-12F-10J-2JudgmentJ-1J-3J-4J-6J-5J-10J-7J-8J-9J-11J-12R-2ResonanceR-1R-3R-4R-6R-5R-10R-7R-8R-9R-11R-120.580.49#Value to the MarketerDrives customer behaviour & loyaltyPricing scopeSynergistic effects with other elements of mixGrowth potential extensions, co-branding, licensingLeverage with the tradeProfits & shareholder value - $$$Deutsche Securities#Another perspective 4 Dimensions of Brand Value Linked to the Brands CultureReputation value: brand serves as containers of reputation; shape perceived qualityRelationship value: shape relationship perceptions B2B & servicesExperiential value: frame customer experiences: heuristic thinkingSymbolic value: express values & attitudes; status, lifestyle, politics, aspirational identities#Your paired examples?#Brands with Resonance? Why?#Brand PositioningDefine competitive frame of referenceTarget marketNature of competitionDefine desired brand knowledge structuresPoints-of-paritynecessarycompetitivePoints-of-differencestrong, favorable, and unique brand associations#Issues in Implementing Brand PositioningEstablishing Category MembershipIdentifying & Choosing POPs & PODsCommunicating & Establishing POPs & PODsSustaining & Evolving PODs & POPs

#Establishing Category MembershipCompetitive sets change over time e.g., beer & wine vs hard liquor, bottled water vs sodaShort term vs long term perspective Fedex vs email, video stores vs downloads, VOIP vs long distance Product proliferation intra brand competitionUsage situation influences brand competition home vs out, gift vs personal

#Identifying & Choosing POPs & PODsDesirability criteria (consumer perspective)Personally relevantDistinctive & superiorBelievable & credibleDeliverability criteria (firm perspective)Feasible ProfitablePre-emptive, defensible & difficult to attack#Major Challenges in PositioningFind compelling & impactful points-of-difference (MacMillan & McGrath, HBR, 97)How do people become aware of their need for your product and service?How do consumers find your offering?How do consumers make their final selection?How do consumers order and purchase your product or service?What happens when your product or service is delivered?How is your product installed?How is your product or service paid for?#Major Challenges in PositioningFind compelling & impactful points-of-difference (cont.) How is your product stored?How is your product moved around?What is the consumer really using your product for?What do consumers need help with when they use your product?What about returns or exchanges?How is your product repaired or serviced?What happens when your product is disposed of or no longer used?#Communicating & Establishing POPs & PODsCreate POPs and PODs in the face of attribute & benefit trade-offsPrice & qualityConvenience & qualityTaste & low caloriesEfficacy & mildnessPower & safetyUbiquity & prestigeComprehensiveness (variety) & simplicityStrength & refinement

#What makes a brand different?Recent study of customers, perceptions of top brands in airlines, coffee, beer, fast food, hotels, long distance telephone, soup in terms of functional, economic, psychological, social, & cultural factorsFindings:Brand type can be more important than category to positioning of a brandWithin category hierarchy in terms of five factors rated: functional & economic most desirable but cultural, social, & psychological most closely related to choiceFunctional & economic cost of entry or parity factorsCultural, social, & psychological point of difference or differentiators#Re-Imagine by Tom Peters Insights on Experiences & DreamsHarley Davidson does not sell motorcycles, Starbucks does not sell coffee, Club Med does not sell vacations, Guinness does not sell beer what do they provide?Experience a way of life, indelible memory, wanting more, member of a club, viral marketing agent, defines who you areDreamketing touching the clients dreams, art of telling stories & entertaining,promoting the dream not the product, building the brand around the main dream, building buzz, a cult#Performance Features Mckinsey Quarterly 2003, Vol #4

#Example of Retailer

#Sustaining & EvolvingPOPs & PODsCore Brand Values &Core Brand Proposition

#Core Brand ValuesSet of abstract concepts or phrases that characterize the 5-10 most important dimensions of the mental map of a brand. Relate to points-of-parity and points-of-differenceMental Map Core Brand Values Brand Mantra#Mental map for your selected brand?#Brand MantrasA brand mantra is an articulation of the heart and soul of the brand. Brand mantras are short three to five word phrases that capture the irrefutable essence or spirit of the brand positioning and brand values. NikeAuthentic Athletic PerformanceDisneyFun Family Entertainment

#Your Examples?#Some Branding Trends/Challenges Fast Company August 04Brands will be authentic increased transparency & broad scrutinyExperience will be the expression of the brandBrands will be hard-wired into our brainsLine between entertainment & brands will blur be where people are and involved in what they valueIncreasingly complex brands will require new organizational structures- broader responsibility for ownershipBrands will create social & cultural valuesAmerica will be reborn as a more culturally sensitive brand#Topics of Interest from AMA SIG on Brand Strategy & Brand ManagementBrand measurement approaches, barriers, importanceBrand loyalty organizational issuesOutsourcing & strategic partnering brand ownership & controlBrand & the CEO Brand & the webBrand value how is it created/destroyed?Brand standards#SummaryCustomer-based brand equity is the differential effect of brand knowledge on customer response to the marketing of a brandPositive brand equity results when customers are familiar with a brand and have strong, favourable and unique associations for itPower of brand resides with customers hierarchical structure or foundationPositioning strategies can influence the knowledge structures customers have for a brandBrand positioning requires reference points target market, competitive arena, POP & PODPOP & POD used to established unique positionsInternal branding efforts are important

#Next Day with BradBrand building strategies brand elements & marketing mix, secondary associationsChapter readingsAssignments#