Chapter 10 Creating Brand Equity

Creating Brand EquityAssigned text: chapter 10

Prepared by Dr. Pooja Sharma slides- 1-58

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Session Plan

1. What is Brand Equity The role of brands The scope of branding Defining Brand equity Brand equity as a bridge Brand equity Models 2. Building Brand equity

Choosing brand elements Designing holistic marketing activities Leveraging secondary associations Brand Valuation Brand reinforcement Brand revitalization Branding decisions Brand extension Brand portfoliosPrepared by Dr. Pooja Sharma slides- 1-58 2

3. Measuring & Managing Brand equity

4. Devising a branding strategy

What is Brands


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Definition

For the American Marketing Association (AMA) Traditional view design, or a combination of them, intended to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.

A brand is a name, term, sign, symbol, or


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A Brand is a mixture of attributes, tangible and

intangible, symbolized in a Trademark, Name or Symbol, which, if managed properly, creates value and influence. (Yoo et al. 2000) create and secure future earnings by growing customer preference and loyalty.

A Brand is intended to ensure relationships that Brands simplify decision-making, represent an

assurance of quality, and offer a relevant, different, and credible choice among competitive offerings.

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More recent viewscustomers in everyday social life.

Brand is what is experienced and valued by Brand is the mental and emotional file we

have for a product or service or entity. identify and differentiate it are brand elements.

These different components of a brand that


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Why do brands matter? The Role of Brands

What functions do brands perform that make them so valuable to marketers?

Consumers Manufacturer

To firms, brands represent enormously valuable pieces of legal property, capable of influencing consumer behavior, being bought and sold, and providing the security of sustained future revenues.


Why do Brand Matter? To consumers vIdentification of sources of product. vReliability, safety, functionality of products, Signal of quality vEffectiveness, efficiency of services vSymbolic device vPromise or bond with product or maker vEmotional experience (entertainment, approval, self-esteem) To Manufacturer

v v

vMeans of identification to simplifying handling and tracing. vMeans of legally protecting unique feature. vSignal of quality vMeans of endowing products with unique associations. vSources of competitive advantage vInfluence on customers behavior vKeep (and increase) customers vBrand and corporate images vInfluence on shareholders (brand power Prepared by Dr. Pooja Sharma slides- 1-58) 8

Can everything be branded?Branding is all about creating differences between

products Ultimately a brand is something that resides in the minds of consumers. The key to branding is that consumers perceive differences among brands in a product category. Even commodities can be branded: Coffee (Maxwell House), Salt(Tata), flour (Ashirwad),,Oil ( Saffola) ,chickens (Real), even water (Aquafina)


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What is branded?vPhysical Goods vServices. vRetailers vOnline products and services vPeople and organizations vSports, arts, and entertainment vGeographic locations vIdeas and causes


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Kerala Tourism has successfully branded the destination with a brand name, logo, and the tagline Gods Own Country


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Brand equity


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What is Brand Equity?Brand equity is the added value endowed on products and services, which may be reflected in the way consumers, think, feel, and act with respect to the brand.

Aaker brand equity is set of assets (and liability) linked to a brands name and symbol that adds to (or subtracts from) the value provided by a product or service to a firm and that firms customer


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Brand EquityBrand Equity the added values endowed to product

or service.

Brand Awareness Brand Image / Brand salience Brand Experiences / Brand Users Brand loyaltyAwareness


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The major asset categories are

Brand name Awareness Brand recognition: ability to remember experience , liking Brand recall: ability to retrieve brand from memory given a product category, need, usage situation Recognition is key when the brand is present: in store buy decisions; recall when brand is absent: service/online brands Brand Loyalty Reduced marketing cost Attracting new customers; create awareness, reassurance time to respond to competitive threats


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Perceived quality Reason to buy Differentiate /position Price extensions Product functionality important Can be easily copies Brand Consumer perception important Difficult to imitate Brand associations Association that consumer make with the brand Association include product attributes, a celebrity spokesperson, or a particular symbol


Associations ( David Aaker ) Product attribute: Motorazr slimness Customer benefit, rational vs. psychological, shampoo conditioner: thick hair is rational: confidence about looks psychological Relative price: positioning closely related to price level. Hotel: budget, economy midrange, luxury, super luxury Life style/personality: Pepsi generation (My Pepsi My can. Country/ Geographic area. Japanese cars, French wines, swiss watches

In class Exercise : write any 3 brands of your choice and give reason why?Prepared by Dr. Pooja Sharma slides- 1-58 18

Brand EquityThe concept of Brand is usually associated to Brand

Equity (Rust et al. 2004). Financially, brand equity is the value of a brand as a financial asset in balance sheet, proprietary brand assets (eg. patents, trademarks, copyrights, channel relationships) (Brand Value) (Verbeeten et al 2006). From a marketing point of view, brand equity is the measure of customer loyalty to a brand (Brand Loyalty), (Aaker 1992, 1996). Brand equity is the description of the product image that customers (real and prospect) hold (Brand Image) From the production point of view,Brand Equity = Brand Value + Brand Loyalty + Brand ImagePrepared by Dr. Pooja Sharma slides- 1-58 19

Customer based brand equityFormally define customer based brand equity as The

differential effect that brand knowledge has on consumer response to the marketing of that brand. (Keller 1993)

Differential effect Differences in consumer response Brand knowledge A result of consumers knowledge about the brand. (Brand knowledge consists of all the thoughts, feelings, images, experience, belief) 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


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Brand Equity as a Bridge Reflection of past investments in the marketing of a brand Direction for future marketing actions or programs Customer-based brand equity provides direction and focus to future marketing activities Manufactures need to consider there Expenses on the products each year as there Investments Investments in terms of; what Consumer learned, felt, & experienced about the brand. Brand knowledge has two components: Brand awareness and Brand image .


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Brand Equity ModelsA number of models of brand equity offer some

different perspectives.

Brand Asset Valuator: by Young and Rubicam (Y&R) Brandz: BrandDynamics Pyramid by Millward Brown Aaker Model: by David Aaker Brand Resonance Model: comprise model based on customer based brand equity modelPrepared by Dr. Pooja Sharma slides- 1-58 22

Young & Rubicams Brand Asset Valuator (BAV)The most ambitious effort to measure the brand

equity across products, termed the Brand Asset Valuator , is that of Young & Rubicam ( Y & R ) a major global advertising agency. Based on research with almost 500,000 consumers in 44 countries. consumer perception of brands created and managed by Brand Asset Consulting, a division of Young & Rubicam Brands to provide information to enable firms to improve the marketing decisionmaking process and to manage brands better

The Brand Asset Valuator (BAV) is a database of


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Brand Asset Valuator (BAV) conti..There are five key components of brand health in BAV

The Five Pillars. Each pillar is derived from various measures that relate to different aspects of consumers brand perceptions and that together trace the progression of a brands development. Differentiation Energy Relevance Esteem Knowledge


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What Does Each Pillar Means Differentiation : Measures the degree to which abrand is seen as different from others. This is a necessary condition for profitable brand building. Differentiation is the ability for a brand to be distinguished from its competitors. A brand should be as unique a possible. Brand health is built, and maintained by offering a set of differentiating promises to consumers. And by delivering those promises to leverage value.

Energy : Measures the brands ability to meet futureconsumer needs and attract new customers. Measure through out the process.

Relevance : Relevance is the actual and perceived

importance of the brand to a large consumer market segment. This gauges the personal appropriateness of a brand to consumers and is strongly tied to household penetration (the percentage of households that purchase the brand).Prepared by Dr. Pooja Sharma slides- 1-58 25

Esteem: Esteem is the perceived quality and consumer

perceptions about the growing or declining popularity of a brand. Does the brand keep its promises? The consumers response to a marketers brand building activity is driven by his perception of two factors: quality and popularity. Both vary by country and culture. Knowledge: Knowledge is the extent of the consumers awareness of the brand and understanding its identity. The awareness levels about the brand, and what it means, shows the intimacy that consumers share with the brand. True knowledge of the brand comes through building of the brand. measures how familiar and intimates consumers are with the brand Prepared by Dr. Pooja Sharma slides- 1-58 26

A Two-Dimensional Framework for Diagnosing Brands: The Power Grid Young & Rubicam has integrated the two macro dimension of Brand Strength (Differentiation, Energy and Relevance) point to the brand future Value and Brand Stature (Esteem and Knowledge) into a visual analytical device known as the PowerGrid. Report card on past performance. BrandAsset Valuator Brand StrengthDifferentiat Relevance ion Leadi ng Prepared by Dr. Pooja Sharma

Brand Stature

Esteem

Knowledge Laggi ng

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Brand Health Is Captured on the PowerGridHigh High Potential Low earning or Niche High earnings with continuing high potential Leadership High earnings low potential

BRAND STRENGTH (Differentiation and Relevance)

Declining New Eroded Seriously Challenged

Unfocused LowBase: USA Total Adults BAV 2000

BRAND STATURE Prepared by Dr. Pooja Sharma slides- 1-58 (Esteem and Knowledge)

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The PowerGrid

Brands Strength

Brands Stature

Source:http://www.brandassetconsulting.com/ Prepared by Dr. Pooja Sharma slides- 1-58 site_pages/powergrid#

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Brandz: BrandDynamics Pyramid

According to the this model brand building follows a sequential series of steps, each contingent upon successfully accomplishing the preceding one. The Brand Dynamics model adopts a hierarchical approach to determine the strength of relationship a consumer has with a brand. The five levels of the model are: 1. Presence 2. Relevance 3. Performance 4. Advantage 5. Bonding The consumer are placed into one of the five levels depending on their brand responses. By comparing the pattern across brands, it is easy to uncover relative strengths and weakness and where brands can focus their efforts to improve.Prepared by Dr. Pooja Sharma slides- 1-58 30

Brand EquityNothing else beats it

Strong relationship/ high share of categor Bonding

Advantage es it offer something better than othersCan it deliver? Does it offer me something Do I know about it

Performance Relevance Presence

Weak relationship/Low share of categoPrepared by Dr. Pooja Sharma slides- 1-58 31

Aaker ModelDavid Aaker view brand equity as the brand awareness,

brand loyalty and brand association that combine to add to or subtract from the values provided by product or services. Aaker mentioned that brand management starts with brand identity . (a unique set of brand associations that represent that what the brand stands for and promises to customers. Brand identity is typically 8 - 12 elements that represents concepts such as Product scope , product attributes , quality / value , uses , users , country of origin , organizational attributes , brand personality and symbols. Aaker maintains that the identity should be differentiating on some dimensions, suggest parity on others.Prepared by Dr. Pooja Sharma slides- 1-58 32

Brand Resonance ModelBrand building as an ascending series of steps, from

bottom to top. the power of a brand resides on the mind of the customer. According to the model, enacting the four steps means establishing a pyramid of six brand building blocks with customers. These six building blocks must be laid in a sequence of four steps to build strong brand equity. Each step may be undertaken only after the goals of the preceding steps have been achieved. Establish Six Brand building blocks with customer that can assemble in Pyramid. Rational Route Emotional Route


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Brand Equity - Resonance ModelRationa l Route Stages of brand development Emotiona l Route Branding objective at each stage


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Brand Equity - Resonance Model

RESONANCE

JUDGMENTS

FEELING S

PERFORMANCE

IMAGERY

SALIENCEPrepared by Dr. Pooja Sharma slides- 1-58 35

Brand Salience Brand salience measure awareness of the brands.Brand salience relates to the ease with which the brand comes to mind under different situations; to brand awareness Brand Perfor mance While Salience is important, it is usually not

sufficient to build brand equity. How well the product or service meets customers functional needs Product reliability, durability, and serviceability, Service effectiveness, efficiency, and empathy, Style and design, Price

Brand Imagery depends on the extrinsic properties of

Brand Imagery

the product & service. Imagery deals with the intangible brand attributes. Individuals look to these intangibles to satisfy psychological and social needs. Prepared by Dr. Pooja Sharma slides- 1-58

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Promotion campaign: Cadbury Vintage pack: Celebrating 100 years


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Brand Judgments Customer may make all types of judgment with respect to brand.

Brand Feelings: Brand evoke feelings in individuals about themselves and about their image in their social circles. Transformational advertising seeks to leverage such emotions to influence users perception of their actual usage experience.

Br and Resonance Refers to the nature of the relationship customers have with the brand and the extent they feel theyre in sync with it. Brand loyalty.


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Session Plan



3. Measuring &Managing Brand equity


Building Br and Equity:The process depends on all brand related contacts - whether marketers initiated or not . 1.Choosing the brand elements: The initial choices for the brand elements . ( Brand names , URL s , logos , symbols , characteristics , spokespeople , slogans , jingles , packages and signage .)2.Designing Holistic Marketing Activities: the products and

services and all accompanying marketing activities .

3.Leveraging Secondary Association: Other associations

indirectly transferred to the brand by linking it Prepared by Dr. Pooja Sharma slides- 1-58 . to some other entity

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1. Choosing the Brand ElementsBrand elements sometimes called brand identities, are

those trademarkable devices that serve to identify and differentiate the brand. The main ones are brand names, URLs, Logos, symbols, characters, spokespeople, Slogan, jingles, packages and signage.

Memorability Meaningfulness Likability Transferability Adaptability Protectability

Marketers offensive strategy and build brand equity

Defensive role for leveraging and maintaining brand equity


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Memorability

Necessary condition for building brand equity is achieving a high level of brand awareness. Brand elements should inherently be memorable and attention-getting, and therefore facilitate recall or recognition. Memory associated to Brand recall & recognition


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Brand elements may take on all kinds

Meaningful

of meaning, with either descriptive or persuasive content. Two particularly important criteria General information about the nature of the product category Specific information about particular attributes and benefits of the brand The first dimension is an important determinant of brand awareness and salience; the second, of brand image and positioning. Maggi Atta Noodels Ponds Age Miracle Diapers: pampers Fair & Lovely Prepared by Dr. Pooja Sharma slides- 1-58

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Likable

Is it likable visually, verbally, and in other

ways Do customers find the brand element aesthetically appealing? Aesthetically Strategy: the strategy planning and implementation of identify elements that provide sensory experience Descriptive and persuasive elements reduce the burden on marketing communications to build awareness.

ent for line or category extensions? d element add to brand equity across geographic boundaries an


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The more adaptable and flexible the brand element, the easier it is to update it to changes in consumer values and opinions. For example, logos and characters can be given a new look or a new design to make them appear more modern and relevant. Asian paints have achieve adaptability over the years Favicol , Lifebuoy Change in positioning

Adaptability

Protectible

Legally registered trade mark Competitively Name that become synonymous with product

categories. Xerox. Prepared by Dr. Pooja Sharma

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2. Designing Holistic Mar keting Activities.Customers come to know about a brand through

of contact and touch points. Marketers are creating brand contacts and building brand equity through many avenues. Personalization : personalizing marketing is about making sure the brand and its marketing are as relevant as possible to as many customers as possible . Integration : Emphasis on integration Marketing . Mixing and matching marketing activities to maximize their individual and collective effects . Brand identity & brand Image . Internalization : Must adopt an internal perspective to be sure employees and marketing partners appreciate and understand basic branding notions and how they can help / hurt brand equity .Prepared by Dr. Pooja Sharma slides- 1-58

a range

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3. Leveraging Secondar y AssociationsLinking the brand to some other entity -some source

factor or related person, place, or thing may create a new set of associations from the brand to the entity as well as affecting existing brand associations Brand associations may themselves be linked to other entities , creating secondary associations : Company ( through branding strategies) Country of origin (through identification of product origin) Channels of distribution (through channels strategy) Co - branding Special case of co-branding is ingredient branding Characters (through licensing) Celebrity endorsement Events (through sponsorship) Other third - party sources (through awards 47 Prepared by Dr. Pooja Sharma slides- 1-58

3. Lever aging Secondar y Associations


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Examples:McDonald's is that they are American brands and represent aspects of the lifestyle which appeal to people in other countries.. Channel of distribution: Consider Louis Vuitton . They are available in Ambience Mall in NCR, UB City in Bangalore, Hotel Taj Mahal Palace & Tower in Mumbai the exclusivity of each of these places adds to that of the brand Licensing : McDonald is the best example of providing franchise worldwide. Sponsorship: Toyota sponsored NDTVs Greenathon, with and aim of imbibing the qualities of being environment-conscious from the event. Airtel sponsored Marathon Third Party: Toothpaste brands are linked in India with Indian Dental Association, British Dental Association, etc, and to various third party sources Sony Ericsson. Ingredient branding: Teflon: non stick, Dolby: Ultimate sound reproductionPrepared by Dr. Pooja Sharma slides- 1-58 49

Country of origin: coca cola, Harley Davidson, Levi's and

Session Plan





Measuring Brand Equity Brand Audit: A brand audit is a consumer focused

Brand Audits

series of procedures to assess the health of the brand. Marketers should conduct brand audits whenever there is major shift in strategic direction, change

Brand trackingcollect quantitative data from

Brand Tracking

consumers on routine basis over time to improve marketers with consistent, information about how their brand and marketing programs are performing.

Brand Valuation

Brand Valuation: differ from brand equity. Brand valuation: Estimating the total financial value of the brandPrepared by Dr. Pooja Sharma slides- 1-58 51

http://www.millwardbrown.com/sites/optimor/Media/Pdfs/en/BrandZ/BrandZ-2009-Report.pPrepared by Dr. Pooja Sharma slides- 1-58 52

Long term view of marketing

Managing Brand equity

Case Study: actions Nivea

nd

actions that consistently convey the Reinforcement meaning of the brand in terms of What product the brand represents, core benefits, what need it satisfies. Reinforcing brand equity requires innovation and relevance throughout the marketing program.Changes in consumers tastes and

Brand equity is reinforced by marketing

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preferences, the emergence of new competitors or new development can affect Revitalization brand fortune. the Marketers need manage their brands fortune. Do revitalizing a brand is to understand what source of brand equity to begin with Lambretta, Premier Padmini, Ambassador: brand that once dominated their respective markets. 53 Prepared by Dr. Pooja Sharma slides- 1-58

Session Plan





Devising a Branding StrategyBranding strategyDevelop new brand elements

Apply existing brand elements Important : deciding Use a combination of old and new

reflect the number and nature of both common and distinctive brand elements.

ho to brand new product is especially critical.


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Branding decisionsIndividual names Companies often use different brand names for different quality lines within the same product class. P&G: Vicks (Health Care),Whisper (Feminine Hygiene) ,head &Shoulders (hair care)etc. HUL: Dove, Lux, Fair &Lovely, Cif Blanket family names The name of company is used in diverse product category. Family brands are brands applied across a range of product categories. Development costs are lower with blanket names because theres no need to run name research or spend heavily. TATA follow this policy : TATA Salt, TATA Tea ConAgras healthy family brand appears on a wide spectrum of food products.Prepared by Dr. Pooja Sharma slides- 1-58 56

Separate family names In this category firm uses separate family names for its various products. Aditya Birla: Ultra Tech, Hindalco Aluminium, Madura Garment.etc

Corporate name - individual name combo In this category firm combines corporate and individuals names . Nestles Kitkat, Nestle' Perk Nescafe Kelloggs raisin bran, Kelloggs cornflakesPrepared by Dr. Pooja Sharma slides- 1-58 57

Brand Extension When a firm uses an established brand name to introduce a new product.

Brand extension classification Line extension Using a sub-brand to target a new market segment within the same product category Category extension Using the parent brand in a different product category

Brand PortfolioReason to brand portfolio Increasing shelf presence and retailer dependence in the store Attracting consumers seeking variety Increasing internal competition within the firm Yielding economies of scale in advertising, sales, merchandising,

and distribution , Brand can plays roles as part of portfolio. Flankers, Cash Cows, Low end Entry Level, High End Prestige


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Documents

Chapter 10 Creating Brand Equity