Class 1&2 Chapter-1: What is Brand? According to the American Marketing Association (AMA), a brand is a “name, term, sign, symbol or design or a combination to 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 in terms at having actually created a certain amount of awareness, reputation, prominence and so on in the market place, in some sense a distinction can thus be made between the Small – b brand (definition of AMA) Big - B brand (industry practice) The key to creating a brand, according to the AMA definition is, to be able to choose: A name Logo Symbol Package design Or other attribute These different components of a brand that identify and differentiate it can be called brand elements. There are brand names based on: People Places Animals or birds 1
Transcript
Class 1&2
Chapter-1: What is Brand?
According to the American Marketing Association (AMA), a brand is a “name, term, sign,
symbol or design or a combination to 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 in terms at having actually created a certain amount of awareness, reputation,
prominence and so on in the market place, in some sense a distinction can thus be made
between the
Small – b brand (definition of AMA)
Big - B brand (industry practice)
The key to creating a brand, according to the AMA definition is, to be able to choose:
A name
Logo
Symbol
Package design
Or other attribute
These different components of a brand that identify and differentiate it can be called
brand elements.
There are brand names based on:
People
Places
Animals or birds
Or other things or objects
Words with inherent product meaning
Important attributes or benefits
Scientific, natural or prestigious
Brands versus products:
It is important to contrast a brand and a product.
According to Phillip Koller a well regarded marketing academic.
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A product is anything that can be offered to a market for attention, acquisition, use or
consumption that might satisfy a need or want, thus, a product may be
- a physical good
- service
- retail store
- person
- organization
- places
- idea
Kotler defines five levels to a product:
1. Core benefit:
The core benefit level is the fundamental need or want that consumers satisfy by
consuming the product or service.
2. Generic product:
The generic product level is a basic version at the product containing only those
attributes or characteristics absolutely necessary for its functioning.
3. Expected product:
The expected product level is a set of attributes or characteristics that buyers
normally expect and agree to when they purchase a product.
4. Augmented product:
The augmented product level includes additional product attributes, benefits or
related services that distinguish the product from competitors.
5. Potential product:
The potential level includes all of the augmentations and transformations that a
product might ultimately undergo in the future.
These differences may be rational and tangible:
- related to product performance of the brand or more symbolic,
emotional and intangible
- Related to what the brand represents.
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Some brands create competitive advantages with product performance. For
example, Gillette.
Some brands create competitive advantages through non product related
means. For example coca cola.
A brand is a valued intangible asset that needs to be handed carefully.
Why do brand matter?
An obvious question is why are brands important? What functions do they perform that
make them so valuable to marketers?
For consumers:
- Identification of source of product
- Assignment of responsibility to product maker
- Risk reducer
Functional risk
physical risk
Financial risk
Social risk
Psychological risk
Time risk.
- Search cost reducer
- Promise, bond or pact with maker of product
- Symbolic device
- Signal of quality.
For manufacturers:
- Means of identification to simplify handling or tracing
- Means of legally protection unique features
- Signal of quality level to satisfied customers
- Means of endowing product with unique associations
- Source of financial returns.
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Class # 3
Chapter-1.2: Can anything be Brands?
Brands clearly provide important benefits to both consumers and firms.
How do you ‘brand’ a product?
Although firms provide the impetus for brand creation through their marketing programs and
other activities, ultimately.
A brand is something that resides in the minds of consumers a brand is a perceptual entity that
is rooted in reality.
To brand a product it is necessary to teach consumer “who” the product is-by giving it a name
and using other brand elements to help identify it as well as what the product does and why
consumers should care.
In other words,
To brand a product or service it is necessary to give consumers a label for the product (i.e.,
“here’s how you can identify the product”)
To provide meaning for the brand to consumers (i.e., “here’s what this particular product can do
for you and why it is special and different from other brand name products”)
Branding involves creating mental structures and helping consumers organize their knowledge
about products and services in a way that clarifies their decision-making and, in the process,
provides value to the firm.
In other cases, because product differences were virtually nonexistent, brands have been
created by image or other non’ product related consideration.
Product can be defined broadly to include –
- Physical goods
Business - to business products
High tech products
- Services
- Retailers and distributors
- One line products and services
- People and organizations
- Sports, Arts and Entertainment
- Geographic locations
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- Ideas and causes.
What are the Strongest Brands?
Any product can be branded which brands are the strongest that is, the most well-known or
highly regarded?
Branding challenges and opportunities:
Brands may be as important as ever to consumers, brand management may be never difficult
than ever.
Challenges to brand builders:
- Savvy customers
- More complex brand families and portfolios
- Maturing markets
- More sophisticated and increasing competition
- Difficulty in differentiating
- Decreasing brand loyalty in many categories
- Growth of private labels
- Increasing trade power
- Fragmenting media coverage
- Eroding traditional media effectiveness
- Emerging new communication options
- Increasing promotional expenditures
- Decreasing advertising expenditures
- Increasing cost of product introduction and support
- Short-term performance orientation
- Increasing job turnover.
The brand equity concept:
One of the most popular and potentially important marketing concepts to arise in the 1980s was
the concept of brand equity.
The emergence of brand equity however has meant both good news and bad news to
marketers.
The good news is that it has raised the importance at the brand in marketing strategy
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The bad news is that the concept has been defined a number of different ways for a number of
different purposes,
Some definitions of brand equity:
1. The set of association and behaviors on the part of the brand’s customers, channel
members and parent corporation that permits the brand to earn greater volume or
greater margins that it could without the brand name and that gives the brand a strong,
sustainable and differentiated advantage over competitors (Marketing Science Institute)
2. The added value to the firm, the trade or the consumer with which a given brand
endows a product. (Peter Farquhar, Claremont Graduate School)
3. A set of brand assets and liabilities linked to a brand, its name and symbol that add to or
subtract from the value provided by a product or service to a firm and/or to that firms
customers. (David Aaker, University of California at Berkeley)
4. Brands equity is the willingness for someone to continue to purchase your brand or not.
(Market Facts)
5. Brands with equity provide “an own able, trustworthy, relevant, distinctive promise to
consumers”. (Brand Equity Board)
Strategic Brand Management Process:
Strategic brand management involves the design and implementation of marketing programs
and activities to build, measure and manage brand equity.
There are four main steps of strategic brand management –
1. Identifying and establishing brand positioning and values.
2. Planning and implementing brand marketing programs
3. Measuring and interpreting brand performance.
4. Growing and sustaining brand equity.
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Class # 4
Chapter-2.1: Customer-Based Brand Equity
In particular, two fundamentally important questions faced by marketers are:
What do different brands mean to consumers?
How does the brand knowledge of consumers affect their response to marketing
activity?
The basic premise of the CBBE model is that the power of a brand lies in what customers
have learned, felt, seen and heard about the brand as a result of their experiences over
time.
The challenge for marketers in building a strong brand is ensuring that customers have
the right type of experiences with products and services and their accompanying
marketing programs so that the desired thoughts, feelings, images, beliefs, perceptions,
opinions, and so on become linked to the brand.
Customer based brand equity is formally defined as the differential effect that brand
knowledge has on consumer response to the marketing of that brand.
There are three key ingredients to this definition:
1. differential effect
2. brand knowledge
3. Consumer response to marketing.
1. Brand equity arises from differences in consumer response. If no differences
occur, then the brand name product can essentially be classified as a commodity
or generic version of the product. Competition, most likely, would then just be
based on price.
2. These differences in response are a result of consumers’ knowledge about the
brand that is what customers have learned, felt, seen, and heard about the
brand as a result of their experiences over time. Thus although strongly
influenced by the marketing activity of the firm, brand equity ultimately depends
on what resides in the minds of consumers.
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3. The differential response by consumers that makes up the brand equity is
reflected in perceptions, preferences and behavior related to all aspects of the
marketing of a brand (e.g., choice of a brand: recall of copy points from ad.
actions in response to a sales promotion evaluations of a proposal brand
extension).
Marketing Advantages of Strong Brands:
- Improved perceptions of product performance
- Greater loyalty
- Less vulnerability to marketing crises
- Larger margins to competitive marketing actions
- More inelastic consumer response to price increases
- More elastic consumer response to price decreases
- Greater trade cooperation and support
- Increased marketing communication effectiveness
- Possible licensing opportunities
- Additional brand extension opportunities.
Brand Equity as a Bridge:
Consumer knowledge drives the differences that manifest themselves in terms of brand
equity. In an abstract sense, according to this view, brand equity provides marketing
with a vital strategic bridge from their past to their future.
1. Brands as a reflection of the past: Investments in what consumers learned,
felt, experienced and so forth about the brand.
2. Consumers will decide based on their brand beliefs attitudes, and so on
where they think the brand should go and grant permission (or not) to any
marketing action or programs.
Making a Brand Strong: Brand knowledge
From the perspective of the CBBE model, brand knowledge is the key to creating brand
equity, because it creates the differentials effect that drives brand equity.
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What Marketers Need:
Find an insightful to represent how brand knowledge exists in consumer memory.
An influential model of memory developed by psychologists is helpful in this regard.
Brand knowledge can be characterized in terms of two components: Brand awareness
and Brand image
Brand awareness is related to the strength of the brand node or trace in
memory, as reflected by consumer’s ability to identify the brand under different
conditions. Brand awareness is necessary but not always sufficient in building
brand equity without image.
Brand image can be defined as perceptions about a brand as reflected by the
brand associations held in consumer memory.
If someone asked you what came to mind when you thought of apple computers. You
might reply with associations such as “user friendly”, “creative” for desktop publishing”
used at many schools” and so forth.
Blattbery and Deighton define customer equity in terms of the optimal balance between
what is spent on customer acquisition versus what is spent on customer retention.
They offer eight guidelines as a means at maximizing customer equity:
1. Invest in highest value customers first.
2. Transform product management into customer management
3. Consider how add on sales and crass- selling can increase customer equity.
4. Look for ways to reduce acquisition costs.
5. Track customer equity gains and losses against marketing programs.
6. Relate branding to customer equity.
7. Monitor the intrinsic retain ability of your customers.
8. Consider writing separate marketing plans or even building two marketing
organizations for acquisitions and relation efforts.
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Class# 6
C-2.2: Sources of Brand Equity
Customer based brand equity occurs when the consumer has a high level of
awareness and familiarity with the brand and holds some strong, favorable and
unique brand associations in memory.
In some cases, brand awareness alone is sufficient to result in more favorable
consumer response, for example in low-involvement decision settings where
consumer response, for example, in low-involvement decision setting where
consumers are willing to base their choices merely an familiar brands.
In most other cases, however, the strength, favor ability and uniqueness of the
brand associations play a critical role in determining the differential response
making up the brand equity.
If the brand is perceived by consumers to be the same as a representative
version of the product or service in the category then consumer response to
marketing for the brand would not be varied.
If the brand as some salient, unique associations, the consumer response should
differ.
1. Brand Awareness:
Brand awareness consists of brand recognition and brand recall performance.
Brand recognition relates to consumers’ ability to confirm prior exposure to the
brand when given the brand as a cue.
Brand recall relates to consumer’s ability to relative the brand from memory
when given the product category.
Consequences of Brand Awareness:
Brand awareness plays an important role in consumer decision making for three main
reasons:
Learning advantages
Consideration advantages
Choice advantages.
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Establishing Brand Awareness:
Brand awareness is created by increasing the familiarity of the brand through repeated
exposure. That is the more a consumer “experiences” the brand
By seeing it
Hearing it
Or thinking about it.
It is that the brand will become strongly registered in memory. Thus anything that
causes consumers to experience a brand name, symbol, logo, character, packaging or
slogan, or can potentially increase familiarity and awareness of that brand element.
Example include a wide range of communications options such as –
- advertising and promotion
- sponsorship and event marketing
- publicity and public relations
- and outdoor advertising.
This is important to visually and verbally reinforce the brand name with a full
complement of brand elements.
2. Brand Image:
A positive brand image is created by marketing programs that link strong,
favorable and unique associations to the brand in memory:
strength of brand associations
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Consumer Reasons for Brand Choice
Past experience
Price
Quality
Personal
Recommendation
Well known
Advertisement
Rating in
Consumer reports
Environmental
Performance
0% 20% 40% 60% 80% 100%
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Favorability of Brand Association:
In the most basic sense favorable brand associations are created by convincing
consumers that the brand possess relevant attributes and benefits that satisfy the needs
and wants such that they form positive overall brand judgments. Thus the brand is seen
as
- highly convenient
- reliable
- effective
- efficient
- colorful and so
Uniqueness of Brand Associations:
The essence of brand positioning is that the brand has a sustainable competitive
advantage or “unique selling propositions” that gives consumers a compelling reason
why they should buy that particular brand.
These differences may be communicated explicitly by making direct comparisons with
competitor or may be highlighted implicitly without stating a competitive point of
reference.
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Class#7 & 8
Chapter- 2.3: Building a Strong Brand
The four steps of brand building:
1. Ensure identification of the brand with customers and an association of the brand
in customers mind with a specific product class or customer need.
1. Firmly establish the totality of brand meaning in the minds of customers by
strategically linking a host of tangible and intangible brand associations with
certain prosperities.
2. Elicit the proper customer responses to this brand identification.
3. Convert brand response to create an intense, active loyalty relationship between
customers and the brand.
These four steps represent a set of fundamental questions that customers invariable ask
about 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 low much of a
connection would I like to have with you? (Brand relationship)
There is an obvious ordering of the steps in this “branding ladder”, from identity to
meaning to responses to relationships.
Brand Building Blocks
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Resonance
Judgment Feeling
Performance Imagery
Salience
4. RelationshipsWhat about you?
3. ResponseWhat about you?
2. MeaningWhat are you?
1. IdentityWho are you?
Brand Salience:
Brand salience relates to aspects of the awareness of the brand
To what extent is the brand top of mind and easily recalled or recognized?
What types of cues or reminders are necessary?
How pervasive is this brand awareness?
Building brand awareness involves helping customers to understand the product or
service category in which the brand competes.
There must be clear links recording what products or services are sold under the brand
name. In other words, what basic function does the brand provide to customers?
At a broader, more abstract level, however, brand awareness also means making sure
that customers know which of their “needs” the brand through these products is
designed to satisfy. Brand awareness can be characterized according to depth and
breath.
Breadth:
The breath of brand awareness concerns the range of purchase and usage situation in
which the brand clement comes to mind.
Depth:
The depth of brand awareness concerns the likelihood that a brand Clements will come
to mind and the ease with which it does so.
Product category structure:
The organization of the product category hierarchy that generally prevails in memory
will play one important role in consumers’ decision-making.
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Example: Beverage category hierarchy
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Beverages
Water Flavored
AlcoholicNonalcoholic
Milk JuicesWine Distilled
Spirits
Hot beveragesSoft drinks Beer
Strategic Implication:
Understanding the product hierarchy has important implication for how to improve
brand awareness as well as how to properly position the brand.
In terms of building awareness, in many cases, it is not only the depth of awareness that
matters but also the breadth of awareness and properly linking the brand to various
degrees and cues in consumers’ minds.
Brand Performance:
Brand performance relates to the ways in which the product or service attempts to
meet customers more functional needs. There are five important types of attitudes and
benefits that often underlie brand performance as follows:
1. Primary ingredients and supplementary features.
2. Product reliability, durability and serviceability.
3. Service effectiveness, efficiency and empathy.
4. Style and design.
5. Price.
Brand Imagery:
Brand imagery deals with the extremis properties of the product or service, including
the ways in which the brand attempts to meet customers’ psychological or social needs.
Brand imagery is how people think about a brand abstractly, rather than what they think
the brand actually does. Imagery refers to more intangible aspects.
Many kinds of intangibles can be linked to a brand but four categories can be highlight:
1. User profiles
2. Purchase and usage situations
3. Personality and values
4. History, heritage and experiences.
Brand Judgments:
Brand judgments focus on customer’s personal opinions and evaluations with regard to
the brand. In terms of creating a strong brand, focus types of summary brand judgments
are particularly important:
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Quality
Credulity
Consideration
Superiority.
Brand Feelings:
Brand feelings are customers’ emotional responses and reactions with respect to the
brand. Researches have defined transformational advertising as advertising designed to
change consumers’ perceptions of the actual usage experience with the product. The
following are six important types of brand building feelings.
1. Warmth:
The brand makes consumers feel a sense of calm or peacefulness, consumers
may feel sentimental, warmhearted or affectionate about the brand.
2. Fun:
The brand makes consumers feel amused, lighthearted, joyous, playful, cheerful
and so on.
3. Excitement:
The brand makes consumers feel energized and feel that they are experiencing
something special. Brands that evoke feelings of excitement may result in
consumers feeling a sense of elation of “being alive” or being cool, sexy, or so
on.
4. Security:
The brand produces a feeling of safety, comfort and self-assurance. As a result of
the brand, consumers do not experience worry or concerns that they might have
otherwise felt.
5. Social Approved:
The brand results in consumers having positive feeling about the reactions of
others; that is consumers feel that others look favorably on their appearance,
behavior and so on.
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6. Self-respect:
The brand makes consumers feels better about themselves: consumers feel a
sense of pride, accomplishment or fulfillment.
Brand Resonance:
The final steps of the model focuses on the ultimate relationship and level of
identification that the customer has with the brand. Brand resonance can be broken
down into four categories:
1. Behavioral loyalty: How often do customers purchase a brand and how much do
the purchase?
2. Attitudinal attachment: To create resonance, there also needs to be a strong
personal attachment. Customers should so beyond having a positive attitude to
viewing the brand as a being something special in a broader context.
3. Sense of community: Identification with a brand community may reflect an
important social phenomenon whereby customers feel a kinship or affiliation
with other people associated with the brand.
4. Active engagement: Perhaps the strongest affirmation of brand loyalty is when
customers are willing to invest time, energy, money or other resources in the
brand beyond those expended during purchase or consumption of the brand.
Possible Measures of Brand Building Blocks:
I) Salience (Deep, Brood Brand Awareness):
What brands of product or service category can you think of?
Have you ever beard of these brands?
Which brands might you be likely to use under the following situations?
How frequently do you think of this brand?
II) Performance (Points of Parity and Paints of difference):
Compared with other brands in the category, how well does this brand provide
the basic functions of the product or service category?
Compared with other brands in the category, how well does this brand satisfy
the basic needs of the product or service category?
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To what extent does this brand have special features?
How reliable is this brand?
How durable is this brand?
How effective is this brands service? Does it completely satisfy your
requirements?
How efficient is this brands service in terms of speed, responsiveness and so
forth?
How courteous and helpful one the providers of this brands services?
How stylish do you find this brand?
How much do you like the look, feel and other design aspects of this brand?
Compared with other brand in the category with which it competes are this
brands prices generally higher, lower or about the same?
Compared with other brands in the category with which it competes, do this
brands prices change more frequently, less frequently or about the same
amount?
III) Imagery (Pointing of paints and points of difference):
To what extent do people you admire and respect use this brand?
How much do you like people who use this brand?
How well do the following words describe this brand: down to earth, honest,
The strategy and tactics behind marketing programs have changed dramatically in
recent years in the new economy.
Digitalization and connectivity (Internet and mobile devices)
Disintermediation and re-intermediation (via new middleman of various sorts)
Customization and customization (through tailored products and by providing
customers ingredients to make products themselves)
Industry Convergence (through the blurring of industry boundaries)
New customer and compound capabilities (see the following figure)
Consumers A substantial increase in customer power. A greater variety of available goods and services. A great amount of information about practically anything. A greater case in interacting and in placing and receiving order. An ability to chat with strangers and compare notes on products and services
Companies Can operate a powerful new information and sales channel with augmented
geographic reach to inform and promote their company and its products. Can collect fuller and richer information about their markets, customers,
prospects and competitors. Can facilitate two-way communication with their customers and prospects, and
facilitate transaction efficiency. Can send ads, coupons, promotion and information by e-mail to customers and
prospects who give them permission. Can customize their offerings and services to individual customers. Can improve their purchasing, recruiting, training and internal and external
communication.
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The new capabilities of the new Economy
The rapid expansion of the Internet has brought the need for personalized marketing
into sharp focus.
Personalizing Marketing:
Marketers are embracing concepts such as experiential marketing, one to one
marketing and permission marketing.
Experiential Marketing:
The idea is not to sell something, but to demonstrate how a brand can enrich a
customer’s life.
One-to-one Marketing:
One-to-one marketing help to add value by providing information to marketers. The
fundamental concepts at one-to-one marketing.
Focus on individual consumers through consumers’ databases – “we single out
consumers.”
Respond to consumer dialogue via-interactivity – “The consumer talks to us.”
Customize products and services – “We make something unique for him or her.”
In one-to-one marketing, the firm is able to reduce switching costs, reduce
transaction costs, and maximize utility for consumers, all helping to build strong, and
profitable relationships.
Permission Marketing:
If marketers want to attract a consumer’s attention, they first need to get his or her
permission with some kind of inducement – a free sample, a sales promotion or
discount, a contest and so on. In this manner, marketers can potentially develop
stronger relationships with consumers so that they will wish to receive further
communications in the future.
Five Steps to effective Permission Marketing:
- Offer the prospect an incentive to volunteer.
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- Offer the interested prospect a curriculum over time, teaching the consumer
about the product or service being marketed.
- Reinforce the incentive to guarantee that the prospect maintains the permission.
- Offer additional incentives to get more permission from the consumer.
- Over time, leverage the permission to change consumer behavior toward profits.
Reconciling the New Marketing Approaches:
One implication of these marketing approaches is that the traditional “marketing Mix”
concept and the notion of this concept – in many cases may not fully describe modern
marketing programs. This topic and some of the newer developments are discussed
next.
Product Strategy:
The product itself is at the heart of brand equity because –
- It is the primary influence on what consumers experience with brand.
- What they hear about a brand from others.
- What the firm can tell customers about the brand in their communications. - Designing and delivering a product or service that fully satisfies consumers’ needs
and wants is a prerequisite for successful marketing, regardless of whether the product is tangible good, service, or organization.
This aspect of brand equity should consider two topics:
1. How consumers form their opinions of the quality and value of a product.
2. Relationship marketing in formulating product strategy and offerings.
1. Perceived Quality and Value:
Perceived quality has been defined as customers’ perception of the overall quality or
superiority of a product or service relative to relevant alternatives and with respect
to its intended purpose.
Achieving a satisfactory level of perceived quality has become more difficult as
continual product improvements over the years.
The specific attributes or benefits that become associated with favorable evaluations
and perceptions of product quality can vary from category to category.
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The CBBE model has identified the following general dimensions of product quality.
Performance: Levels at which the primary characteristic of the product operate (e.g.
low, medium, high or very high).
Features: Secondary elements of a product that complement the primary
characteristics.
Conformance Quality: Degree to which the product meets specifications and is
absent of defects.
Reliability: Consistency of performance over time and from purchase to purchase.
Durability: Expected economic life of the product.
Serviceability: Ease of servicing the product.
Style and design: Appearance or feel of quality.
Consumer beliefs along these dimensions often underlie perceptions of the quality
of the product that, in tern, can influence attitudes and behavior toward a brand.
Brand Intangibles:
Product quality depends not only on functional product performance but on
broader performance considerations as well.
For example,
Product quality may also be affected by factors such as the
- Speed;
- Accuracy;
- Care of product delivery and installation;
- The promptness;
- Courtesy;
- Helpfulness of customer service and training;
- And the quality of repair service;
- Product imagery, such as the symbolism;
- Personality reflected in the brand.
These “augmented” aspects of a product are often crucial to its equity.
Total quality Management and Return on Quality
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TQM adhere to a number of general tenets.
a. Quality must be perceived by customers.
b. Quality must be reflected in every company activity, not just in company
products.
c. Quality requires total employee commitment.
d. Quality requires high-quality partners.
e. Quality can always be improved.
f. Quality improvement sometimes requires quantum leaps.
g. Quality does not always cost more.
h. Quality is necessary but may not be sufficient.
i. A quality drive cannot save a poor product.
Adherents of ROQ advocate improving quality only on those dimensions that produce
tangible customer benefits lower costs, or increased sales.
This bottom-line orientation forces companies to make sure that the quality of the
product offerings is in fact the quality consumers actually want, leading to
recommendations such as
1. Start with an effective quality program.
2. Calculate the cost of current quality initiatives.
3. Determine what key factors retain customers.
4. Focus on quality effort most likely to improve customer satisfaction at a
reasonable cost.
5. Roll out successful programs often pilot-testing the most promising efforts and
cutting ones that do not have a big impact.
6. Improve programs continually.
Value chain:
Consumers often combine quality perceptions with cost perceptions to arrive at an
assessment of the value of a product.
In considering consumer value perceptions, it is important to realize that costs are
not restricted to the actual monetary price but may reflect –
Tracking studies involve information collected from consumers on a routine basis over
time. These studies are a means of applying the brand value chain to understand where,
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Marketing program investment
Customer mindset
Market performance
Shareholder value
Program quality
Market place conditions
Investment sentiment
how much and in what ways brand value is being created. Tracking studies play an
important function for managers by providing consistent baseline information to
facilitate their day to day decision making.
A number of issues must be address in implementing a brand equity tracking system.
What to track
Product brand tracking
Tracking an individual branded product involves measuring brand awareness and image
for the particular brand. In terms of brand awareness, both recall and recognition
measures should be collected.
Corporate of family brand tracking
In the case of a family or corporate brand some additional questions may be warranted.
Although many of these types of questions could be included in tracking studies for
individual products for the brand.
Example of a simple tracking survey for McDonald's
We are conducting a short phone interview or fast food restaurant chain.
Brand awareness and usage
a) What brands of quick service restaurant chains are you aware of?
b) At which brands of quick service restaurant chains would you consider eating?
c) Have you eaten in a quick service restaurant chains in the last week? Which
ones?
d) If you were to eat in as quick service restaurant tomorrow for lunch, which one
would you go to?
e) What if instead it were for dinner? Where would you go?
f) Finally what if instead it were for breakfast? Where would you go?
g) Which are your favorite quick service restaurant chains?
We want to ask you some general questions about a particular quick service
restaurant chain, McDonalds.
a) Have you heard of this restaurant? (Establish familiarity)
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b) Have you eaten at this restaurant? (Establish trail)
c) When I say McDonald’s, what are the first association that come to your mind?
Anything else?
Brand Judgments
We are interested in your overall opinion of McDonalds
a) How favorable is your attitude toward McDonalds?
b) How well does McDonalds satisfy your needs?
c) How likely would you be to recommend McDonalds to others?
d) How good a value is McDonalds?
e) Is McDonald's worth a premium price?
f) What do you like best about McDonalds?
g) What is most unique about McDonalds?
h) To what extent does McDonalds offer advantages that other brands cannot?
i) To what extent is McDonald’s superior to other brands in the quick service
restaurant category?
j) Compared to other brands in the quick service restaurant category, how well
does McDonalds satisfy your basic needs?
We now want to ask you some questions about McDonalds as a company please
indicate your agreement with the following statements.
McDonalds is
a) Innovative
b) Knowledgeable
c) Trustworthy
d) Likeable
e) Concerned about their customers
f) Concerned about society as a whole
g) Admirable
Brand Performance
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We now would like to ask some specific questions about McDonalds. Please indicate
your agreement with the following statements.
McDonalds
a) Convenient to eat at
b) Provides quick efficient service
c) Has clean facilities
d) Is for the whole family
e) Has delicious food
f) Has a varied menu
g) Has friendly, courteous staff
h) Offers fun promotions
i) Has a stylish and attractive look
j) Has high quality food.
Brand Imagery
a) To what extent do people you admire and respect eat at McDonalds?
b) How much do you like people who eat at McDonalds?
c) How well do each of the following words desirable this brand? Down to earth,
honest, daring, up to date, reliable, successful, upper class, charming, out
doorsy.
d) Is McDonalds a restaurant that you can use in a lot of different situation?
e) To what extent does thinking of McDonalds bring back pleasant memories?
f) To what extant do you feel you grew up with McDonalds?
Brand feeling
Does McDonalds give you a feeling of………….
a) Warmth?
b) Fun?
c) Excitement?
d) Security?
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e) Social approval?
f) Self-respect?
Brand resonance
a) I consider myself loyal to McDonalds
b) I buy McDonalds wherever I can
c) I would go out of my way to eat at McDonalds
d) I really love McDonalds
e) I would really miss McDonalds if it went away
f) McDonalds is special to me
g) McDonalds is more than a product to me
h) I really identify with people who eat at McDonalds
i) I feel a deep connection with others who eat at McDonalds
j) I really like to talk about McDonalds to others
k) I am always interested in learning more about McDonalds
l) I would be interested in merchandise with the McDonalds name on it
m) I am proud to have others knows I eat at McDonalds
n) I like to visit the website for McDonalds
o) Compared to other people I follow news about McDonalds closely.
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Chapter-9: Measuring Sources of Brand Equity: Capturing Customer MindsetUnderstanding the current and desired brand knowledge structures of consumers is vital
to effectively building and managing brand equity.
Marketing should be able to construct detailed mental maps of consumers to
understand exactly what exists in their minds concerning brands -
All their thoughts
Feelings
Perceptions
Images
Beliefs and
Attitudes towards different brands.
These mental blueprints would them provide managers with strategic and tactical
guidance to help them make brand decisions. Unfortunately, these brand knowledge
structures are not easily measured because they reside only in only in consumer’s
minds. Many large companies conduct exhaustive research studies to learn as much as
possible about consumers.
Understanding Consumer Behavior
Who buys our product or service?
Who makes the decision to buy the product?
Who influences the decision to buy the product?
How is the purchase decision made? Who assumes what role?
What does the customer buy? What needs must be satisfied?
Why do customers buy a particular brand?
Where do they go or look to buy the product or service?
When do the buy? Any seasonality factors?
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What are customer’s attitudes toward our product?
What social factors might influence the purchase decision?
Does the customer’s lifestyle influence their decisions?
How is our product perceived by customers?
How do demographic factors influence the purchase decisions?
A number of detailed sophisticated research techniques and methods have been
developed to help marketers’ better understanding consumer knowledge structures.
Qualitative Research Techniques:
Qualitative research techniques are often employed to identify possible brand
associations and sources of brand equity. Qualitative research techniques are relatively
unstructured management approaches whereby a range of possible consumer
responses is permitted.
A number of different types of associations can become linked a brand. For example,
consider the possible attribute and benefit beliefs that might exist for Levi’s 501 brand
of jeans.
Simple Levi’s Brand Attribute and Benefit AssociationsAttributes
Product Related User Imagery Usage Imagery Brand personality Attributes
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Blue design Shrink to fit cotton fabric button fly two horse patch small red pocket tag
Western American blue collar, hardworking traditional strong, rugged and masculine
Appropriate for outdoor work and casual social situations
Honest, classic contemporary approach able independent and universal
Levi’s501
(Brand)
High-quality long lasting and durable
Functional Benefits Symbolic Benefits
Experimental Benefits
BenefitsFree Association
The primary purpose of free association tasks is to identify the range of possible brand
associations in consumer’s minds. But they may also provide some rough indication of
the relative strength, favorability and uniqueness of brand associations. There are some
useful questions that can help marketers to clarify the range of possible
Useful questions include the following:
What do you like best about the brand?
What are its positive aspects?
What do you dislike?
What are its disadvantages?
What do you find unique about the brand?
How is it different from other brands?
In what ways is it the same?
Consumers can be asked further follow-up questions to describe what the brand means
to them in terms of "who, what, when, where, why and how" questions such as the
following:
Who uses the brand? What kind of person?
When and where do they use the brand? What types of situations?
Why do people use the brand? What do they get out of using it?
How do they use the brand? What do they use it for?
Projective Techniques:
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Feeling of self confidenceand
Self-assuranceComfortable fitting and
relaxing to wear
Projective techniques are diagnostic tools to uncover the true opinions and feelings of
consumers when they are unwilling or otherwise unable to express themselves on these
matters.
The idea behind projective techniques is that consumers are presented with an
incomplete stimulus and asked to complete it or are given an ambiguous stimulus that
may not make sense in and asked to make sense of it.
Sentence competition
Story completion
Role play
Third person techniques.
Brand Personality and Values
Brand personality is the human characteristics or traits that can be attributed to a
brand. Brand personality can be assessed more definitively through adjective checklists
or ratings.
Experimental Methods:
Researchers are attempting to improve the effectiveness of their qualitative approaches
as well as go beyond traditional qualitative techniques to research consumers in their
natural environment.
Example, A research can go to consumers’ homes in the morning to see how they
approach their days. By taping more directly into their actual home, work, or shopping
behaviors, researches might be able to client more meaningful responses from
consumers.
Quantities Research Techniques
Quantitative measures of brand knowledge can be employed to better assess the depth
and breadth of brand awareness the strength favor ability and unique of brand
associations.
The values of brand responses and feeling and
The extent and nature of brand relationships.
Awareness:
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Recall that brand awareness is related to the strength of the brand in memory as
reflected consumer’s ability to identify various brand elements (the brand name, logo,
symbol, character, packaging and slogan)
Image:
One vitally important aspect of the brand is its image, as reflected by the associations
that consumers hold regarding the brand. Brand associations come in many different
forms and can be classified along many different dimensions. It is useful to make a
distinction between lower-level considerations related to consumer perceptions of
specific performance and imagery attributes and benefits versus higher-level
considerations related to overall judgments, feeling, attitudes and behaviors.
Open ended measures could be employed that tap associations as follows -
1. What are the strongest associations you have to the brand? What comes to mind
when you think of the brand (strength)
2. What is good about the brand? What do you like about the brand? What is bad
about the brand? What do you dislike about the brand? (Favorability)
3. What is unique about the brand? What characteristics of features does the
brand share with other brands? (Uniqueness)
Different scales can be constructed depending on the decisions taken with respect to a
number of considerations,
- Absolute or comparative scales.
- Verbal, numerical or spatial scales.
- Number of points on the scales.
- Blanched or unbalanced scales.
- Treatment of "no opinions" or "do not know" response in the scale.
Brand Responses:
The purpose of measuring more general; higher-level considerations is to find out how
consumers combine all of the more specific, lower-level considerations about the brand
in their minds to form different types of brand responses and evaluations. Examples of
measures of key brand judgments (Brand Quality, credibility, consideration and
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superiority) and feeling (warm, fun, exciting, sense of security, social approval and self-
respect).
Brand Relationships:
Characterized brand relationships in terms of brand resource and offered possible
measures for each of the four key dimensions:
- Behavioral loyalty
- Attitudinal attachment
- Sense of community and
- Active engagement.
To capture reported brand usage and behavioral loyalty, consumers could be asked
several questions directly.
- Which brand of film do you usually buy?
- Which brand of film did you buy last time?
- Do you have any film on hand? Which brand?
- Which brands of film did you consider buying?
- Which brand of film will you buy next time?
- Do you expect to take pictures in the next two weeks?
- Have you taken any pictures in the last two weeks?
- If the brand had not been available, what would you have done?
Waited
Gone to another store
Bought another brand and
If another brand, which one?
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Chapter-10: Capturing Market Performance
Brand equity is a multidimensional concept and complex enough that many different
types of measures are required. Multidimensional measures increase the diagnostic
power of marketing research and the likelihood that managers will better understand
what is happening to their brands and, perhaps more important, why.
A Product with positive brand equity can potentially enjoy the following seven
important customer related benefits:
1. Be perceived differently and produce different interpretations of product
performance.
2. Enjoy greater loyalty and be less vulnerable to competitive marketing actions.
3. Command larger margins and have more inelastic responses to price increases
and elastic responses to price decreases.
4. Receive greater trade cooperation and support.
5. Increase marketing communication effectiveness
6. Yield licensing opportunities.
7. Support brand extensions.
Comparative methods involve experiments that examine consumer attitudes and
behavior toward a brand to directly estimate the benefits arising from having a high
level of awareness and strong, favorable, and unique brand associations. There are two
types of comparative methods.
1. Brand-based comparative approaches
2. Marketing-based comparative approaches
Brand-based comparative approaches use experiments in which one group of
consumers responds to an element of the marketing program or some marketing
activity when it is attributed to the target brand and another group responds to
the same element or activity when it is attributed to a competitive or fictitiously
named brand.
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Marketing-based comparative approaches use experiments in which consumers
respond to changes in elements of the marketing program or marketing activity
for the target brand or competitive brands.
Conjoint analysis is a survey-based multivariate technique that enables marketers
to profile the consumer decision process with respect to products and brands.
Specially, by asking consumers to express preferences or make choices among a
number of different carefully designed product profiles,
Green and Wind reported one classic study of conjoint analysis.
This study concerned consumer evaluations of a spot-remover product. Five attributes
were studied:
Package design
Brand name
Price
Good Housekeeping seal.
Money –back guarantee.
1.0 1.0
Utility Utility
0 a b c 0 k2r glory Bissel
1.0 Package Design 1.0 Brand Name
Utility Utility
0 1.19 1.39 1.59 Money back grantee
Holistic Methods
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Comparative methods attempt to approximate specific benefits of brand equity.
Holistic methods attempt to place an overall value on the brand in either abstract utility
terms or concrete financial terms. There are two approaches of this method.
1. Residual Approaches: the residual approach attempts to examine the value of
the brand by subtracting consumers’ preferences for the brand based on
physical product attributes alone from their overall brand preferences.
2. Valuation approach: The valuation approach attempts to place a financial value
on brand equity for accounting purposes, mergers and acquisitions, or other
such reasons.
In determining the value of a brand in an acquisition or merger, three main approaches
are possible:
1. The cost approach maintains that brand equity is the amount of money
that would be required to reproduce or replace the brand (including all
costs for research and development, test marketing, advertising etc)
2. The income approach argues that brand equity is the discounted future
earnings stream for the brand. Three such income approaches are as
follows:
Capitalizing royalty earnings from a brand name (when these
can be defined)
Capitalizing the premium profits that are earned by a branded
product ( by comparing its performance with that of an
unbranded product)
Capitalizing the actual profitability of a brand after allowing for
the costs of maintaining it and the effects of taxation.
Class# 11 & 12
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Chapter-3: BRAND POSITIONING AND VALUES
Identifying and establishing Brand Positioning.
Basic Concepts:
Brand Positioning is at the heart of marketing strategy. Kotler defines brand
positioning as the “act of designing the company’s offer and image so that it
occupies a distinct and valued place in the target customer’s minds.
Deciding on a positioning requires deciding:
Who the target consumer is?
Who the main competitors are?
How the brand is similar to these competitors?
How the brand is different from these competitors?
Target Market:
Identifying the consumer target is important because different consumers may have
different brand knowledge structures and thus different perceptions and
preferences for the brand.
Without this understanding, it may be difficult to be able to state which brand
associations should be strongly held, favorable, and unique.
A number of considerations are important in defining and segmenting a market and
choosing target market segments.
A few are highlighted here.
Market segmentation involves dividing the market into distinct groups of
homogeneous consumers who have similar needs and consumer behavior and thus
require similar marketing mixes. One research study uncovered four main segments.
The Sensory Segment: Seeking flavor and product appearance
Psychographics (Values, opinions, and attitudes, lifestyle, activities)
Demographic (income, Age, Sex, Race, Family)
Geographic (International, Regional)
A number of criteria have been offered to guide segmentation and target market
decisions.
Identifiably: Can segment identification be easily determined?
Size: Is there adequate sales potential in the segment?
Accessibility: Are specialized distribution outlets and communication
media available to the segment?
Responsiveness: How favorably will the segment respond to a tailored
marketing program?
Nature of Competition:
Defining the nature of competition because certain firms have also decided to target
that segment in the past (or plan to do so in the future) or because consumers in that
segment already may look to certain brands in their purchase decisions.
Products are often organized in consumer’s minds in a hierarchical fashion such that
competition can be defined at a number of different levels.
Points of Parity and Points of Difference:
Arriving at the proper positioning requires establishing the correct points of difference
and points of parity associations.
Points of Difference Association:
Points of Differences are attributes or benefits that consumers strongly associate with a
brand, positively evaluate, and believe that they could not find to the same extent with
a competitive brand. The concept of PODs has much in common with several other well-
known marketing concepts.
v) Unique selling proposition through ad.
vi) Sustainable competitive advantage.
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Points of Parity Association: Points of parity (POPs), on the other hand, are those
associations that are not necessarily unique to the brand but may in fact be shared with
other brands. These types of associations come in two basic forms.
vii) Category
viii) Competitive
Positioning Guidelines:
Two key issues in arriving at the optimal competitive brand positioning are:
3. Defining and communicating the competitive frame of reference:
Defining a competitive frame of reference for a brand positioning is to determine
category membership. Membership indicates the products or sets of products with
which a brand competes.
Choosing to compete in different categories often results in different competitive
frames or reference.
Communicating category membership informs the consumer about the goals that
they might achieve by using a product or service consumer may not be convinced
that the brand is a true, valid member of the category.
In such cases, alerting consumers to a brand’s category membership is warranted.
There are three main ways to convey a brand’s category membership:
Communicating category benefits
Comparing to exemplars
and relying on the product descriptor.
4. Choosing and Establishing points of parity and points of difference:
Choosing POP & POD:
Points of parity are driven by the needs of category membership (to create category
POPs) and the necessity of negating competitors’ POPs (to create competitive POPs).
In terms of choosing points of difference, broadly, the two most important
considerations are that consumers find the POD desirable and believe that the firm
has the capabilities to deliver on it.
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Establishing POP & POD
Many of the attributes or benefits that make up the POP or PODs are negatively
correlated. That is if consumers mentally rate the brand highly on one particular
attributes or benefit, they also rate it poorly on another important attribute.
For Example,
It might be difficult to position a brand as “inexpensive” and at the same time assert
that it is “of the highest quality” several additional ways exist address the problem of
negatively correlated POPs and PODs.
Separate the Attributes
Leverage equity of another entity
Redefine the relationship
Updating positioning over time
Defining and Establishing Brand Values:
Brand Positioning describes how a brand can effectively compete against a specified set
of competitors in a particular market.
In many cases, however, brands span multiple product categories and therefore may
have multiple distinct-yet related-positioning.
As brands evolve and expand across categories, it is often useful to define a set of core
brand values to capture the important dimensions of the brand meaning and what the
brand represents.
It is also often useful to synthesize the core brand values to a core brand promise or
brand mantra that reflects the essential “heart and Soul” of the brand.
3. Core Brand Values:
Core brand values are those set of abstract associations (attributes and benefits)
that characterize the 5 to 10 most important aspects or dimensions of a brand.
4. Brand Mantras:
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A brand mantra is an articulation of the “heart and Soul” of the brand. Brand
mantras are short, three-to five-word phases that capture the irrefutable
essence or sprit of the brand positioning and brand values.
Internal Branding:
Internal branding making sure that member of the organization is properly aligned with
the brand and what it represents.
Chapter-11
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Designing and Implementing Branding Strategies
The branding strategies of a firm concerns which brand elements a firm choose to apply
across the products it offers for sale. It is critical because it is the means by which the
firm can help consumers understanding its products and services and organize them in
the3ir minds. There are two important strategic tools.
a) The brand product matrix and
b) The brand hierarchy.
The Brand Product Matrix
Brand product matrix is a graphical representation of all the brands and products sold by
the firm. The matrix (or grid) has the brands of a firm as rows and the corresponding
products as columns.
Products
1 2 ..................... N
A
B
Brands
M
Brand Product Matrix
The rows of the matrix represent brand product relationships and capture the brand
extension strategy of the firm in terms of the number and nature of products sold under
the firm's brand.
A brand line consists of all products original as well as line and category extensions sold
under a particular brand. Thus, a brand line would be one row of the matrix. The columns
of all matrix, represent product relationships and capture the brand portfolio strategy in
terms of the number and nature of brands to be markets in each category.
The brand portfolio is the set of all brands and brand lines that a particular firm offers for
sale to buyers in a particular category. Thus, a brand portfolio would be one particular
column of the matrix. Different brands may be designed and markets to appeal to
different market segments.
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A brand portfolio must be judged on its ability to collectively maximize brand
equity:
A branding strategy for a firm can be characterized according to its breadth (i.e. in terms
of brand product relationships and brand extension strategy) and its depth (i.e. in terms of
product brand relationships and the brand portfolio or mix).
Gap Brand Portfolio
Breadth of a Branding Strategy:
The breadth of a branding strategy concerns the number and nature of different products
linked to the brands sold by a firm.
Strategic decisions have to be made concerning how many different product lines the
company should carry the breadth of the product mix:
Strategic decisions have also to be made as well as how many variants should be offered
in each product line (i.e. the depth of the product mix).
Lohmann and Winer provide an in depth consideration of factors affecting product
category attractiveness.
The three main sets of factors determine the inherent attractiveness of product category as
follows:
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Price
High
LowQuality
Low High
Old NavyGap
Banana Republic
Category Attractiveness Criteria
Depth to Product Mix
Decision conversing the optimal product line strategy must also be made. Product line
analysis requires a clear understanding of the market and the cast interdependencies
between products.
Specifically, product line analysis involves by each item or member in the product line.
The ability of each item in the product line to withstand competition and address
consumer needs also must be assessed.
A product line is too short if the manager can increase long-term profits by adding items.
A line is too long if the manager can increase profits by dropping items.
From a branding perspective, longer product lines may decrease the consistency of the
associated brand image if the same brand is used the proper branding strategy must be
decided upon in terms of which brand elements should be used for which products.
Depth of a Branding Strategy:
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Aggregate Market Factors Market size Market growth Stage in product life cycle Sales cyclicity Seasonality Profits
Category Factors Threat of new entrants Bargaining power of buyers Bargaining power of suppliers Current category rivals Pressures from substitutes Category capacity
Environmental Factors Technological Political Economic Regulatory Social
The depth of a branding strategy concerns the number and nature of different brands
marketed in the product class sold by a firm.
The main reason to adopt multiple brands is to pursue multiple market segments. These
different market segments may be based on –
different price segments
different channels of distribution
different geographic boundaries
Some other reason for introducing multiple brands in a category include the
following:
1. To attract a particular market segment not currently being covered by other brands
of the firm.
2. To serve as a flanker and product flagship brands.
3. To serve as a cow and be milked for profits
4. To serve as a low and entry-level product to attract new customers to the brand
franchise.
5. To serve as a high-end prestige product to add prestige and credibility to the entire
brand portfolio.
6. To increase shelf presence and retailer dependence in the store.
7. To attract consumers seeking variety who may otherwise have switched to
another brand.
8. To increase internal completion within the firm.
9. To yield economics to scale in advertising sales, merchandising and physical
distribution.
Brand Hierarchy
A brand hierarchy is a means of summarizing the branding strategy by displaying the
number and nature of common and distinctive brand elements across the firms products.
There are different ways to define brand elements and levels of the hierarchy. For
example:
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1 Product brand: Assign an exclusive name to a single product to accord the brand
its own individual positioning (e.g. Procter & Gamble's Article, Tide and Dash
Laundry detergents)
2. Line brand: Extend the specific concept across different products allowing for
cross branding (e.g. Renault automobiles).
3. Range brand: Bestow a single name and promise on a group of products having
the same ability (e.g. Green Giant foods)
4. Umbrella brand: Support products in different markets each with its own
communication and individual promise (e.g. canon canners, photocopies and
office equipment).
5. Source brand: Similar to an umbrella brand but the products are directly named.
6. Endorsing brand: Give approved to a wide directly of products grouped under
product brand, line brands or range brands (e.g. General Motors Cars)
The simplest representation of possible brand elements and thus political levels of a
brand hierarchy from to bottom might be as follows:
1. Corporate (or company) brand (e.g. General Motors)
2. Family brand (e.g. Buick)
3. Individual brand (e.g. Park Avenue)
4. Modifier (designating item or model (e.g. Ultra)
1. Corporate brand: The highest level of the hierarchy technically always involves
one brand.
2. Family brand: A family brand is defined as brand that is used in more than one
product category but is not necessarily the name of the company or corporation
itself.
3. Individual brand: An individual brand is defined as a brand that has been
restricted to essentially one product category, although it may be used for several
different product types within the category.
4. Modifier: A modifier is a means to designate a specific item or model type or a
particular version or configuration of the product.
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Brand Hierarchy
1. Corporate or Company Brand Level:
A corporate image can be thought of as the associations that consumers have in
memory to the company or corporation making the product or providing the
service as a whole.
Corporate brand believes that consumer purchase decision depends on their
perceptions of a firm whole role in society.
The only sustainable competitive advantage is its reputation.
A company should maintain its corporate image.
A corporate image depends on a number of factors
Determinants of Corporate Image:
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General Motors
Bus Truck Car Pick-up Double Tracker
Export Domestic
2. Family Brand Level:
Family brands are brands applied across arrange to product categories. Other
authors sometimes refer to these types of brands as range brands or umbrella
brands.
Family brands may be used instead of corporate brands for several reasons.
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Corporate Social Conduct Environment Citizenship Quality of life Communities
Corporate Contributions Conduct Charities Schools & University Art organizations
