Chapter 9

Creating Brand Equity

Presented By: Rose Bunn
October 14, 2009
 Address The Following
1.What is a brand & how does branding work?
2.What is brand equity?
3.How is brand equity built, measured, &
managed?
4.What are the important decisions in
developing a branding strategy?
 What Is Brand Equity
 Brand: “a name, term, sign, symbol, or design,
or combination of them, intended to identify
the goods or services of one seller or group
of sellers & to differentiate them from those
of competitors”
 Thus, a product or service whose dimensions
differentiate it in some way from other
products or services designed to satisfy the
same need.
 Thisneed can be functional, rational, tangible,
symbolic, emotional or intangible.
 Role of Brands
 P 237- 238
 Identify the maker

 Simplify product handling

 Organize accounting

 Offer legal protection

 Signify quality

 Create barriers to entry

 Serve as a competitive advantage

 Secure price premium


 Scope of Branding
 Branding: endowing products and services
with the power of the brand.


 Mktrs need to teach consumers “who” the

product is – by giving it a name & other
brand elements to identify it – as well as
what the product does & why consumers
should care
 Defining 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
 Mktrs & researchers use diff. perspectives to study brand
equity like customer- based brand equity: the differential
effect that brand knowledge has on consumer response
to the mkting of that brand


 3 key ingredients of customer- based brand equity:

1. Brand equity arises from differences in consumer response
2. Differences in response are a result of consumer’s
knowledge about the brand. Brand knowledge: all the
thoughts feelings, images, experiences, beliefs, etc.
that become associated with the brand
3. The differential response by consumers that makes up
brand equity is reflected in perceptions, preferences, &
behavior related to all aspects of the mkting of a brand



 Brand Equity as a Bridge
 Brand promise: the marketer’s vision of what
the brand must be and do for consumers


 From the perspective of brand equity, mktrs

should think of all the mkting dollars spent
on products & services each year as an
investment in consumer brand knowledge,
which emphasizes the importance of quality,
not quantity


 Brand Equity Models
 Brand Asset Valuator Model (BAV): provides comparative
measures of brand equity of thousands of brands
across several diff. categories


 5 key components
 Differentiation: measures the difference of a brand from
others
 Energy: measures the brand’s sense of momentum
 Relevance: measures the breadth of a brand’s appeal
 Esteem: measures how well the brand is regarded &
respected
 Knowledge: measures how familiar the brand is to
consumers
 These components combine to form a Power Grid pg 243
 Brand Equity Models
 BRANDZ Model: shows under the
BrandDynamics pyramid that brand building
follows a sequential series of steps, each
contingent upon successfully accomplishing
the preceding one pg 244


 Presence: Do I know about it

 Relevance: Does it offer me something
 Performance: Can it deliver
 Advantage: Does it offer something better
than others
 Bonding: Nothing else beats it


 Brand Equity Models
 Aaker Model: brand equity viewed as the
brand awareness, loyalty, &association that
combine to add or subtract from the value
provided by a product or service.
 Brand identity: unique set of brand
associations that rep what the brand stands
for & promises to customers, an apparitional
brand image
 Important Elements:
 Core elements: drives brand- building programs
 Extended identity elements: add texture &
guidance
 Brand essence: communicates the brand
identity in a compact & inspiring way
 Brand Equity Models
 Brand Resonance Model: pg 245
 Based on the Brand Resonance Pyramid which goes from bottom to
top:
1. Identify= Who are you?
2. Meaning= What are you?
3. Response= What about you?
4. Relationships= What about you & me?


 Must establish 6 “branding building blocks”

1. Brand Salience: how often & how easily customer think of the brand
under various purchase or consumption situations
2. Brand performance: how well the product or service meets customers’
functional needs
3. Brand imagery: the extrinsic properties of the product or service,
including the ways in which the brand attempts to meet customers’
psychological or social needs.
4. Brand judgments: focus on customers’ own personal opinions &
evaluations
5. Brand feelings: customers’ emotional response & reactions with respect
to to the brand
6. Brand resonance: the nature of the relationship customers have with the
brand and the extent to which they feel they’re “in sync” with it
 Building Brand Equity
 Mktrs build brand equity by creating the right brand
knowledge structures with the right consumers


 3 main brand quality drivers:

1.The initial choices for the brand elements or
identities making up the brand (brand names,
URLs, logos, symbols, characters, spokespeople,
slogans, jingles, packages,& signage)
2.The product & service & all accompanying
marketing activities & supporting programs
3.Other associations indirectly transferred to the
brand by linking it to some other entity (a
person, place, or thing)
4.

 Choosing Brand Elements
 Brand elements: those trademarkable devices
that identify & differentiate the brand


 Brand Element Choice Criteria:

1.Memorable
2.Meaningful Brand building
3.Likable
4.Transferable
5.Adaptable Defensive
6.Protectable

 Designing Holistic Marketing Activities
 Brands are not built by advertising alone. Customers know a
brand though a range of contacts & touch points
 Brand contact: any info-.bearing experience, whether
positive or negative, a customer or prospect has with the
brand, the product category, or the mkt that relates to the
mktr’s product or service
 3 important new themes in designing brand- building mkting
programs:
1. Personalizing : making sure the brand& its mkting are as
relevant as possible to as many customers as possible,
but no 2 customer are identical
 Permission mkting: mkting to consumers only after gaining their
permission because “interruption mkting” is no longer allowed
via mass- media campaigns
2. Integration : mixing & matching mkting activities to
maximize their individual & collective effects
3. Internalization: Internal branding are activities & processes
that help to inform & inspire employees
 Brand bonding: when customers experience the company as
delivering on its brand promise. The brand promise will not be
delivered unless everyone in the company lives the brand

 Internal Branding
 When employees believe in the brand, they’re
motivated to work harder & feel greater
loyalty to the firm
 Important principles for internal branding are:

1.Choose the right moment

2.Link internal and external marketing
3.Bring the brand alive for employees


 Leveraging Secondary Associations

 The third & final way to build brand equity is
to “borrow” it.

 Measuring Brand Equity
 2 approaches to measuring brand equity:
1. Indirect: assesses potential sources of brand equity
by identifying & tracking consumer brand
knowledge structures
2. Direct: assesses the actual impact of brand
knowledge on consumer response to diff.
aspects of mkting
 Brand audit: a consumer-focused series of
procedures to assess the health of the brand,
uncover its sources of brand equity, & suggest
ways to improve & leverage its equity
 Brand- tracking studies: collect quantitative data
from consumers on a routine basis over time
to provide mktrs with consistent, baseline info
about how their brands & mkting programs are
performing on key dimensions
 Brand valuation: the job of estimating the total
financial value of the brand
 Interbrand’s Steps in Calculating
Brand Equity
 Brand Valuation Chain pg 252
 Market segmentation

 Financial analysis

 Role of branding

 Brand strength

 Brand value calculation


 Managing Brand Equity
 Brand Reinforcement: brand equity is
reinforced by mkting action that consistently
convey the meaning of the brand in terms of


1.What products the brand represents, what core

benefits it supplies, what needs it
satisfies, &
2.How the brand makes products superior, &
which strong, favorable,unique brand
associations should exist in the minds of
consumers
 Brand Revitalization
 Often the first thing to do in revitalizing brand
is to understand the sources of brand equity
were to begin with.


 Second, decide whether to retain the same

positioning or create a new one, & it so,
which new one.
 Devising a Branding Strategy
 Branding Strategy: reflects the number &
nature of both common & distinctive brand
elements it applies to the products it sells


 3 main choices in introducing a new product:

1.It can develop new brand elements for the new
product.
2.It can apply some of its existing brand
elements
3.It can use a combination of new & existing
brand elements
 Branding Decisions
 4 general strategies in choosing which brand
names to use:
1.Individual names: company doesn’t tie its
reputation to the product, Ex. General
Mill’s Bisquick
2.Blanket family names: Corporate brands across
their range of products, Ex. GE
3.Separate family names for all products: Ex.
Sears uses Kenmore for appliances and
Holmart for home installations
4.Corporate names combined with individual
product names: Ex. Kellogg combine with
Kellogg’s Rice Krispies
 Brand Extensions
 Most new products are extensions of the brand
company. Ex. Microsoft Xbox video games, Nabisco
100 Calorie Packs, etc.
 Advantages of Brand Extensions
1. Facilitate new- product acceptance
2. Provide positive feedback to the parent brand &
company
 Disadvantages of Brand Extensions
1. May cause the brand name to be less strongly
identified with any one product, called the “line
extension trap”
2. Brand dilution: when consumers no longer associate a
brand name with a specific product or highly
similar product & start to think less of the brand
3. Brand extension revenues can be high from consumers
switching from the parent brand and in effect
cannibalizing the parent brand.
4. Often overlooked is when the firm forgoes the chance
to create a new brand with its own unique image &
equity.
 Brand Portfolios
 Brand portfolio: the set of all brands & brand
lines a particular firm offers for sale in a
particular category or market segment


 Reasons for multiple brands in a category:

 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 Roles in a Portfolio
 Flankers: fighter brands that are positioned
with respect to competitors’ brands so that a
more important flagship brand can retain
their desired positioning
 Cash cows: brands that are able to maintain
their profitability with virtually no marketing
support despite dwindling sales
 Low-end, entry-level: a low- priced brand in
the portfolio used to attract customers to the
brand franchise
 High-end prestige: a high-priced brand that
add prestige & credibility to the entire
portfolio

 Customer Equity
 Customer equity: the sum of lifetime values of
all customers


 Customer lifetime value is affected by

considering cost & profits related to:
 Acquisition: affected by the number of
prospects, acquisition probability of a
prospect, & acquisition spending per prospect
 Retention: influenced by the retention rate &
retention spending level
 Add- on spending: a function of efficiency of
add- on selling, the number of add- on selling
offers given to existing customers, & the
response rate to new offers
THE END
 QUESTIONS
 COMMENTS
 CONCERNS