Chapter 9 Creating Brand Equity

www.hypermarketing2.co

m

Chapter 9

Creating Brand Equity

Philip Kotler

Kevin Lane Keller

Donna Sia, Shelle Caiga, Rhea Jardin

May 4, 2012

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m

1. What is brand and how does branding

work?

2. What is brand equity?

3. How is brand equity built, measured

and managed?

4. What are the important decisions in

developing a branding strategy?

Outline:

What do we have to know?



m

Brand is a “name, term, sign, symbol,

or design or combination of then,

intended to identify the goods or

services of one seller or group of

sellers and to differentiate them

from those of competitors.”

What is brand?



m

Branding is endowing products and

services with the power of a brand.

It creates mental structures that help

consumers organize their knowledge

about products and services in a

way that clarifies their decision

making and, in the process, provides

value to the chain.

How does branding work?



m

Brand equity is the added value endowed

on products and services.

It may be reflected in the way consumers

think, feel and act with respect to the

brand, as well as in the prices, market

share and profitability the brand

commands for the firm.

What is Brand Equity?



m

Outline:

Like playing basketball, managing

a brand involves strategies…

Brand Positioning

Brand Marketing

Brand Performance

Brand Value

Step 1. Identify and establish

Step 2. Plan and implement

Step 3. Measure and interpret

Step 4. Grow and sustain



m

What can branding do to your

business?

Identifies the maker & signifies quality

Offers legal protectionServes as competitive

advantage

Creates barriers to entry



m

Organizes accounting and simplifies product handling

Secures price premium

Loyola SchoolsAGSBSchool of LawSchool of Medicine


business?



m

Provide customers the right type of

experience to create desired brand

knowledge.

Hi, I’m Jersey 17, I am passionate and I try to be the best at what I do

especially basketball.

Jersey 17’s Brand Print



m

What is important to me is to give my fans a good game and give my best for the team.




knowledge.



m

Even though I am busy with my career, I was still able to finish my education & start

my own business




knowledge.



m

I hope I inspire young athletes to pursue their

dreams, whatever sport they are into.




knowledge.



m

Images

Feelings

Thoughts & Beliefs




knowledge.



m

What STRONG brands do…

Improved perceptions of product performanceGreater Loyalty



m


Large Margins



m


Less vulnerability to competitive marketing actionsMore inelastic consumer responseIncreased marketing communications effectiveness



m

Brand Asset Evaluator (BAV) compares brand equity

of thousands of brands across hundreds of

categories and these are its four pillars (Derek)

One comparative measure of

brand equity is the BAV

Dif

fere

nti

ati

on

En

erg

y

Este

em

Kn

ow

led

ge

Re

leva

nce

Brand Equity



m

Brand

Essence

Extended

Identity

Core

Identity

Develop your brand’s identity.

Aaker Model



m

Brand

Essence:

Movement for

self-esteem

Campaign for

real beauty

Empowering

Women

Develop your brand’s identity

by:

Aaker Model



m

Brand Essence:

Movement for self-

esteem

Campaign for real

beauty


by:

Extended

Identity:

Dove Men +

Care

Aaker Model



m

Brand Essence:

Movement for self-

esteem

Campaign for real

beauty


by:

Extended

Identity:

Dove Men +

CareCore

Identity:

Beautiful

Skin

Aaker Model



m

Bonding

Advantage

Performance

Relevance

Presence

Brand building follows a

sequential series of steps:

Strong relationshipHigh share of category expenditure

Weak relationship/Low share of categoryexpenditure

Brand Dynamics Pyramid



m

Building relationship with a

brand…

Do I know about it?


PresencePresence



m

Does it offer me something?



brand…

Presence

Relevance



m

Can it deliver?



brand…

Presence

Relevance

Performance

Advantage

Bonding



m

Does it offer something better than others?



brand…

Presence

Relevance

Performance

Advantage

Bonding



m

Nothing else beats it!


I


brand…

Presence

Relevance

Performance

Advantage

Bonding



m


brand…

Presence

Performance & Imagery

Judgment & Feelings

Resonance

Brand Salience

Brand Resonance Pyramid



m

Brand Elements

What drives brand equity?

Men and Women for others…The Ateneo Way…



m

Memorable

Like the person of your dreams,

brand elements should be…

Meaningful

Likeable

Transferable?

Adaptable

Protectible



m

Marketing Activities




m

Meaning Transference


Mirrors your brand



m

Designing Holistic Marketing Activities

Brands are not built by

advertising alone.

Personalize Integrate Internalize



m

Brand Audits

Measuring Brand Equity

Brand-Tracking

Brand Valuation

Health of brandSource of brand equityWays to improve equity

Where, how much & what ways brand value is being created?

Financial Value of the brand



m

In summary:

Brand

Images

Feelings

Thoughts & Beliefs

RelationshipBrand Consumer

Brand Elements

Presence

Relevance

Performance

Advantage

Bonding

Presence

Marketing Activities and Meaning Transference

The company

Brand Valuation



m

Chapter 9


Philip Kotler

Kevin Lane Keller

Donna Sia, Shelle Caiga, Rhea Jardin

May 4, 2012



m

CREATING

BRAND

EQUITY

MARKMA

Rhea G. Jardin

May 4, 2012




m

A product or service whose

dimensions differentiate it in

some way from other products or

services designed to satisfy the

same need

What is a Brand?



m



m

1. Identify the source or maker of the product

that satisfies the consumers’ needs

2. Simplifies product handling or tracing

3. Offers firm legal protection with intellectual

property rights

4. Signals level of quality so that buyers can

easily choose the product again

Role of Brands



m

- Endowing products and services with the

power of the brand by creating differences

between products

- “who” the product is, what the product does

and why consumers should care

What is Branding?



m

- the added value on products and services

- reflected on how consumers think,

feel and act on the brand

- reflected in the prices, market share

and profitability for the firm

Brand Equity



m

A. Positive – customers react more favorably to

a product and the way it is marketed

B. Negative – customers react less favorably to

marketing activity for the brand

Three (3) key ingredients:

1. Consumer response

2. Consumer’s knowledge about the brand

3. Consumer’s perceptions, preferences and

behavior

Customer-based brand equity



m

1. Quality is the critical factor not the quantity

2. Dictates future directions for the brand based

on how consumers think and feel about the brand

Brand promise - the marketer’s vision of what the

brand must be and do for consumers

Brand Knowledge



m

1. Differentiation – measures the degree to which

a brand is seen as different from others

2. Energy – measures the brand’s sense of

momentum

3. Relevance – measures the breadth of a brand’s

appeal

4. Esteem – measures how well the brand is

regarded and respected

5. Knowledge – measures how familiar and

intimate consumers are with the brand

Five pillars of brand equity



m

+ + = energized brand strength

- point to the brand’s future value

+ = brand stature

- “report card” of past performance

“Pillar’s pattern” reveal a brand’s current and

future status

Five pillars of brand equity



m

BrandDynamics Pyramid

-Developed by Millward Brown of BRANDZ

Marketing as a model of brand strength

Nothing else beats it

Does it offer something

better than the others?

Can it deliver?

Does it offer me

something?

Do I know

about it?

Bonding

Advantage

Performance

Relevance

Presence



m

BrandDynamics Pyramid

-Developed by Millward Brown of BRANDZ

Marketing as a model of brand strength

Nothing else beats it Strong relationship / High

Does it offer something share of category expenditure

better than the others?

Can it deliver?

Does it offer me

something?

Do I know Weak relationship /

about it? Low share of category

expenditure

Bonding

Advantage

Performance

Relevance

Presence



m

Brand Resonance Model

Stages of Brand Brand Brand building Branding objective at

Development blocks each stage

4. Relationships

= what about

you and me?

3. Response =

what about

you?

2. Meaning =

what are you?

1. Identity =

who are you?

Intense, active

loyalty

Positive,

accessible

reactions

Points-of-

parity &

difference

Deep, broad

brand

awareness

Resonance

Judgments Feelings

Performance Imagery

Salience



m

Brand salience – how often and how easily customers think of the brand

under various purchase or consumption situations

Brand performance – how well the product or service meets customers’

functional needs

Brand imagery – the ways in which brand attempts to meet customers’

psychological or social needs

Brand judgments – focus on customers’ own personal opinions and

evaluations

Brand feelings – customers’ emotional responses and reactions with respect

to the brand

Brand resonance – nature of the relationship customers have with the brand

(“in sync” with it)

Brand Resonance Model



m

1. Initial choices for the brand elements or identities making

up the brand

2. The way the brand is integrated into the supporting

marketing program

3. The associations indirectly transferred to the brand by

linking the brand to some other entity

Brand equity drivers



m

1. Memorable – how easily the brand element is recalled and

recognized (i.e. short names)

2. Meaningful – credibility of the brand, product ingredient or

type of person who might use the brand

3. Likeable – how visually and verbally appealing is the brand

element

4. Transferable – can the brand element be used to introduce

new products in the same or different categories?

Brand element choice criteria



m

5. Adaptable – how adaptable and updatable is the brand

element

Betty Crocker in 1936 Betty Crocker in 1986

6. Protectible – brand names that become synonymous with

product categories

Brand element choice criteria



m

1. Brand audit - measures “where the brand has been”

2. Brand-tracking studies – measure “where the brand is now” and

whether marketing programs are having the intended effects

Measuring brand equity



m

Brand valuation – estimating the total financial value of the brand

Measuring brand equity

Rank Brand 2006 Brand Value

(Billions)

1 Coca-cola $67.00

2 Microsoft $56.93

3 IBM $56.20

4 GE $48.91

5 Intel $38.32

6 Nokia $30.13

7 Toyota $27.94

8 Disney $27.85

9 McDonald’s $27.50

10 Mercedes-Benz $22.13



m

1. Brand reinforcement

- requires innovation and relevance throughout the marketing

program

- brand must be moving forward in the right direction with new

offerings and ways to market them

2. Brand revitalization

- reinvention strategy

- renewal of commitment to quality

Managing brand equity



m

reflected on where

customers price market share profitability quality is a factor over quantity

Pillars of brand equity:

differentiation energy relevance esteem knowledge

energized brand strength brand stature

criteria for brand element:

memorable/short meaningful likeable transferrable

adaptable protectible

Brand Equity



m

CREATING

BRAND

EQUITY

MARKMA

Rhea G. Jardin

May 4, 2012




m

Chapter 9


Philip Kotler

Kevin Lane Keller

Donna Sia

May 4, 2012



m

1. What is brand and how does branding

work?

2. What is brand equity?

3. How is brand equity built, measured

and managed?

4. What are the important decisions in

developing a branding strategy?

Outline:

What do we have to know?



m

Brand is a “name, term, sign, symbol,

or design or combination of then,

intended to identify the goods or

services of one seller or group of

sellers and to differentiate them

from those of competitors.”

What is brand?



m

Branding is endowing products and

services with the power of a brand.

It creates mental structures that help

consumers organize their knowledge

about products and services in a

way that clarifies their decision

making and, in the process, provides

value to the chain.

How does branding work?



m

Brand equity is the added value endowed

on products and services.

It may be reflected in the way consumers

think, feel and act with respect to the

brand, as well as in the prices, market

share and profitability the brand

commands for the firm.

What is Brand Equity?



m

Outline:

Like playing basketball, managing

a brand involves strategies…

Brand Positioning

Brand Marketing

Brand Performance

Brand Value

Step 1. Identify and establish

Step 2. Plan and implement

Step 3. Measure and interpret

Step 4. Grow and sustain



m


business?

Identifies the maker & signifies quality

Offers legal protectionServes as competitive

advantage

Creates barriers to entry



m

Organizes accounting and simplifies product handling

Secures price premium

Loyola SchoolsAGSBSchool of LawSchool of Medicine


business?



m



knowledge.

Hi, I’m Jersey 17, I am passionate and I try to be the best at what I do

especially basketball.




m

What is important to me is to give my fans a good game and give my best for the team.




knowledge.



m

Even though I am busy with my career, I was still able to finish my education & start

my own business




knowledge.



m

I hope I inspire young athletes to pursue their

dreams, whatever sport they are into.




knowledge.



m

Images

Feelings

Thoughts & Beliefs




knowledge.



m


Improved perceptions of product performanceGreater Loyalty



m


Large Margins



m


Less vulnerability to competitive marketing actionsMore inelastic consumer responseIncreased marketing communications effectiveness



m

Brand Asset Evaluator (BAV) compares brand equity

of thousands of brands across hundreds of

categories and these are its four pillars (Derek)

One comparative measure of

brand equity is the BAV

Dif

fere

nti

ati

on

En

erg

y

Este

em

Kn

ow

led

ge

Re

leva

nce

Brand Equity



m

Brand

Essence

Extended

Identity

Core

Identity

Develop your brand’s identity.

Aaker Model



m

Brand

Essence:

Movement for

self-esteem

Campaign for

real beauty

Empowering

Women


by:

Aaker Model



m

Brand Essence:

Movement for self-

esteem

Campaign for real

beauty


by:

Extended

Identity:

Dove Men +

Care

Aaker Model



m

Brand Essence:

Movement for self-

esteem

Campaign for real

beauty


by:

Extended

Identity:

Dove Men +

CareCore

Identity:

Beautiful

Skin

Aaker Model



m

Bonding

Advantage

Performance

Relevance

Presence

Brand building follows a

sequential series of steps:

Strong relationshipHigh share of category expenditure

Weak relationship/Low share of categoryexpenditure




m


brand…

Do I know about it?


PresencePresence



m

Does it offer me something?



brand…

Presence

Relevance



m

Can it deliver?



brand…

Presence

Relevance

Performance

Advantage

Bonding



m

Does it offer something better than others?



brand…

Presence

Relevance

Performance

Advantage

Bonding



m

Nothing else beats it!


I


brand…

Presence

Relevance

Performance

Advantage

Bonding



m


brand…

Brand Resonance Pyramid

Presence

Performance & Imagery

Judgment & Feelings

Resonance

Brand Salience



m

Brand Elements


Men and Women for others…The Ateneo Way…



m

Memorable

Like the person of your dreams,

brand elements should be…

Meaningful

Likeable

Transferable?

Adaptable

Protectible



m

Marketing Activities




m

Meaning Transference


Mirrors your brand



m

Designing Holistic Marketing Activities

Brands are not built by

advertising alone.

Personalize Integrate Internalize



m

Brand Audits

Measuring Brand Equity

Brand-Tracking

Brand Valuation

Health of brandSource of brand equityWays to improve equity

Where, how much & what ways brand value is being created?

Financial Value of the brand



m

In summary:

Brand

Images

Feelings

Thoughts & Beliefs

RelationshipBrand Consumer

Brand Elements

Presence

Relevance

Performance

Advantage

Bonding

Presence

Marketing Activities and Meaning Transference

The company

Brand Valuation



m

Chapter 9


Philip Kotler

Kevin Lane Keller

Donna Sia

May 4, 2012


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Chapter 9 Creating Brand Equity

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