BRAND EQUITY

Creating Brand Equity

•What is Brand Equity
•Building Brand Equity
•Measuring Brand Equity
•Managing Brand Equity
•Devising a Brand Strategy
 A brand is a name, term, sign, symbol or
design, or a combination of them, intended to
identify the goods or services of one seller or
group of sellers and to differentiate them from
those of competitors.
-American Marketing Association
 “A product is something made in a factory; a brand is
something that is bought by a customer. A product can be
copied by a competitor; a brand is unique. A product can
be quickly outdated; a successful brand is timeless.”
- Stephen King (WPP Group, London)
Roles of Brand
• Identify the source of the
product / Maker
• Signify the quality
• Offers legal protection
• Serve as a competitive
advantage
• Emphasizes the bases of
differentiation
• Reduces the primacy of
price upon the purchase
decision
Branding is endowing products and services
with the power of the brand. It is all about
creating differences between products.
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. –Philip Kotler
• “The value of a brand. From a consumer perspective, brand
equity is based on consumer attitudes about positive brand
attributes and favorable consequences of brand use.” –
American Marketing Association
• “A set of assets and liabilities linked to a brand, its name and
symbol, that adds to or subtracts from the value provided by a
product or service to a firm and/or to that firm’s
customers.” – David Aaker
Brand Equity
“The tangible and intangible value that a brand
provides positively or negatively to an organization,
its products, its services, and its bottom-line derived
from consumer knowledge, perceptions, and
experiences with the brand.” — Susan Gunelius
 Brand Trial

Brand
Brand Preference
Recognition

BRAND
Brand EQUITY
Awareness Brand Loyalty
Brand Equity Models

Brand Asset Valuator

Aaker Model

BRANDZ

Brand Resonance
Brand Equity Models
• Brand Asset Valuator
- developed by Advertising agency Young and Rubicam (Y&R).

Four Pillars of Brand Equity:

 Energized Differentiation
 Relevance
 Esteem
 Knowledge
Brand Equity Model
• Aaker Model
- viewed by Professor David Aaker

• There are a set of five categories of brand assets and liabilities

which add value to the product.
 Brand Awareness
 Perceived Quality
 Brand Loyalty
 Brand Associations
 Other proprietary assets
Brand Equity Model
• BRANDZ
- developed by marketing research consultants Millward
Brown.
-it involves series of steps and each steps have their
objectives.
 Presence
 Relevance
 Performance
 Advantage
 Bonding
Brand Equity Model
• Brand Resonance
- views brand building as an ascending, sequential series of
steps
1. Ensuring identification of the brand with customers’ minds with a
specific product class or customer need.
2. Firmly establishing the brand into the mind of the consumer.
3. Eliciting proper customer response to in terms of brand related
judgment and feelings.
4. Converting brand response to create an intense, active loyalty
relationship between customers and the brand.
Brand Equity Model
• 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’
financial needs
• Brand Imagery
- describes the extrinsic properties of the product or
service, including the ways in which the brand attempts to
meet the customers’ psychological or social needs.
Brand Equity Model

• Brand Judgment
- focus on customers’ own personal opinions and
evaluations.
• Brand Feelings
- customers’ emotional response and reactions with
respect to the brand
• Brand Resonance
- 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
• Three Main Factors
1. The initial choices for the brand elements or identities
making up the brand (brand names, URLs, logos,
symbols, characters, spokespeople, slogans, jingles,
packages, and signage)
2. The product and service and all accompanying
marketing activities and supporting marketing
programs
3. Other associations indirectly transferred to the brand
by linking it to some other entity (a person, place, or
thing)
Measuring Brand Equity

Brand Audits

Brand Tracking

Brand Valuation
Measuring Brand Equity
• Brand Audits
- consumer-focused series of procedures to assess
the health of the brand, uncover its source of brand
equity, and suggest ways to improve and leverage its
equity
• Brand Tracking Audits
- collects quantitative data from consumers over
time to provide consistent, baseline information about
how brands and marketing programs are performing
• Brand Valuation
-the job of estimating the total financial value of the
brand.
Managing Brand Equity
• Brand Reinforcement
Marketers can reinforce brand equity by consistently conveying the
brand’s meaning in terms of
(1) what products it represents, what core benefits it supplies, and
what needs it satisfies; and
(2) how the brand makes products superior, and which strong,
favorable, and unique brand associations should exist in consumers’
minds.
Managing Brand Equity
• Brand Revitalization

These are products that have fallen on hard times but

managed to turn around and come back to the market.
Devising a Brand Strategy

Develop new brand elements

for the new product

Apply some of its existing

brand elements

Use a combination of new and

existing brand elements
Benefits of Brand Equity
• Asset management/leveraging
• Consumer franchise (facilitates loyalty)
• Lower communication costs
• Improved prices/margins/market share
• More power with the trade
• Barrier to competitive entry
• Effect on financial valuation of the firm
• Value to your Consumer
• Recognition, consistency, confidence, image/status,
etc.
 Rationale for building a brand

From Organizational Perspective

• An identifier
• A Short hand for Information
• Legal Protection
• Differential advantage
• Unique association
• Price Premiums
• Enhancing Customer Loyalty
• Higher market Share
• Inelastic Increase to Price Increase
• As a barrier to the entry of other brands
• Can be bought and sold as an Asset
 Rationale for building a brand

From Customer Perspective

• Source of Identification
• Heuristic or Proxy for Quality
• Source of Evaluation
• A tool to simplify Decisions
• Risk Reducer
• Financial Risk
• Performance Risk
• Time Risk
• Social Risk
• Psychological Risk
• Tool to express Self Image
 Branding Challenges

• Intelligent and Educated Customers

• Growth of Private Labels
• Brand Proliferation
• Increasing Trade power
• Media Fragmentation and rise of new brands
• Increasing cost of product introduction and support
• Increasing job turnover
 Key Issues in Branding

• Whether to brand or not

• How to build brand equity
• How to brand brand equity
• Understanding customers and how they purchase a brand
• How to position the brand
• Which marketing mix to choose
• How to design branding strategies
• How to manage brands over time
• How to manage brands across geographical boundaries
 Types of Brands

• Functional Brands
• Image Brands
• Experience Brands
FRANCHISE

• A brand franchise is an arrangement between a corporation and a

local retailer or wholesaler to function as the exclusive seller for the
corporation’s products within a defined sales territory.
• In some cases, the contractual agreement will also allow the retailer
to display the corporation’s logo on all sales advertisements or
other promotional material. Since the agreement provides for
exclusive rights to sell the products within the area, the franchisee
normally has a great deal of latitude when it comes to establishing
the retail price for each unit sold.
• As with any type of franchise situation, the retailer or wholesaler
makes certain commitments in exchange for being able to sell the
products in a noncompetitive market.

• While these commitments vary, it is not unusual for the brand

owner to have specific requirements when it comes to the display
of the products within the store, the type and structure of
promotional materials, and input into how any advertising through
various media is conducted.
• Brand name manufacturers often make these requirements as a
means of ensuring that the presentation of their products to
consumers is in keeping with their own advertising standards,
BENEFITS

• One has to do with the products themselves. Assuming that the

brand name or names involved are well-known, the retailer will find
it is much easier to gain the attention of consumers in the local
market, a fact that helps to expedite the realization of a profit from
the business.
• Many brand name manufacturers also provide ongoing support to
their brand franchise partners. This may come in the form of
assistance with store remodeling, pre-printed advertising tools, or
even audio and visual public relations tools that can be utilized to
promote the brand.
• The manufacturer may also offer various other incentives, such as
paid vacations or other rewards if the franchise exceeds a certain
amount of sales within a given accounting period.
• Manufacturers also benefit from a brand franchise arrangement.
Contracting with wholesalers and retailers means that the brand
owner can place the products in front of prospective customers,
without the need to build and staff their own local retail outlets.
• The manufacturer also has the advantage of working with
someone who is local to the area, and is highly likely to have an
established reputation within the area. As a result of the working
relationship with the brand franchise, the brand can be introduced
to new areas with relatively little expense or utilization of the
manufacturer’s resources.