Creating Brand

Equity
Assigned text: chapter 10

Prepared by Dr. Pooja Sharma slides- 1-58 1

 1. What is Brand Equity
 The role of brands
 The scope of branding
 Defining Brand equity
 Brand equity as a bridge
 Brand equity Models
Session Plan

2. Building Brand equity

Choosing brand elements
Designing holistic marketing activities
Leveraging secondary associations
3. Measuring & Managing Brand equity
Brand Valuation
Brand reinforcement
Brand revitalization
4. Devising a branding strategy
Branding decisions
Brand extension
Brand portfolios

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What is Brands

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 Definition
 For the American Marketing Association (AMA)


 Traditional view –


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

design, or a combination of them, intended
to identify the goods and services of one
seller or group of sellers and to
differentiate them from those of
competition.”

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
A Brand is a mixture of attributes, tangible and
intangible, symbolized in a Trademark, Name or
Symbol, which, if managed properly, creates value and
influence. (Yoo et al. 2000)

A Brand is intended to ensure relationships that
create and secure future earnings by growing
customer preference and loyalty.

Brands simplify decision-making, represent an
assurance of quality, and offer a relevant,
different, and credible choice among competitive
offerings.



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More recent views


Brand is what is experienced and valued by

customers in everyday social life.

Brand is the mental and emotional file we
have for a product or service or entity.

These different components of a brand that
identify and differentiate it are brand
elements.



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 Why do brands matter?
The Role of Brands

 What functions do brands perform that make them

so valuable to marketers?

Consumers
Manufacturer
 To firms, brands represent enormously valuable
pieces of legal property, capable of influencing
consumer behavior, being bought and sold, and
providing the security of sustained future
revenues.


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 Why do Brand Matter?
To consumers To Manufacturer
vIdentification of sources vMeans of identification
of product. to simplifying handling
and tracing.
vReliability, safety, vMeans of legally
functionality of protecting unique
products, Signal of feature.
quality vSignal of quality
vEffectiveness, efficiency vMeans of endowing
of services products with unique
associations.
vSymbolic device vSources of competitive
vPromise or bond with advantage
product or maker vInfluence on customers
behavior
vEmotional experience vKeep (and increase)
(entertainment, approval, customers
self-esteem) vBrand and corporate
v images
vInfluence on
v shareholders (brand
power
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 Can everything be branded?
Branding is all about creating differences between
products
Ultimately a brand is something that resides in the
minds of consumers.
The key to branding is that consumers perceive
differences among brands in a product category.
Even commodities can be branded:
Coffee (Maxwell House), Salt(Tata), flour
(Ashirwad),,Oil ( Saffola) ,chickens (Real), even
water (Aquafina)

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9
 What is branded?
vPhysical Goods
vServices.
vRetailers
vOnline products and services
vPeople and organizations
vSports, arts, and entertainment
vGeographic locations
vIdeas and causes

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Kerala Tourism has successfully branded the destination
with a brand name, logo, and the tagline “God’s Own
Country”

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 Brand equity

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 What is Brand Equity?
Brand equity is the added value endowed on


products and services, which may be reflected in the

way consumers, think, feel, and act with respect to the
brand.


Aaker “ brand equity is set of assets (and

liability) linked to a brand’s name and symbol that
adds to (or subtracts from) the value provided by a
product or service to a firm and that firm’s customer”


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 Brand Equity
Brand Equity  the added values endowed to product
or service.

Brand Awareness
Brand Image / Brand salience
Awareness
Brand Experiences
/
Brand Users
Brand loyalty

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The major asset categories are
Brand name Awareness
Ø Brand recognition: ability to remember
experience , liking
Ø Brand recall: ability to retrieve brand from
memory given a product category, need, usage
situation
Ø Recognition is key when the brand is present: in
store buy decisions; recall when brand is
absent: service/online brands
Brand Loyalty

Reduced marketing cost

Attracting new customers; create awareness,
reassurance
time to respond to competitive threats
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
Perceived quality
Reason to buy
Differentiate /position
Price
extensions
Product

functionality important

Can be easily copies

Brand

Consumer perception important

Difficult to imitate

Brand associations

Association that consumer make with the brand

Association include product attributes, a celebrity
spokesperson, or a particular symbol




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

Associations ( David Aaker )



Product attribute: Motorazr slimness

Customer benefit, rational vs. psychological,
shampoo conditioner: thick hair is rational:
confidence about looks psychological
Relative price: positioning closely related
to price level. Hotel: budget, economy
midrange, luxury, super luxury
Life style/personality: Pepsi generation (My
Pepsi My can.
Country/ Geographic area. Japanese cars, French
wines, swiss watches

 In class Exercise : write any 3 brands of your
choice and give reason why?
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 Brand Equity
The concept of Brand is usually associated to Brand
Equity (Rust et al. 2004).
Financially, brand equity is the value of a brand as
a financial asset in balance sheet, proprietary
brand assets (eg. patents, trademarks, copyrights,
channel relationships) (Brand Value) (Verbeeten et
al 2006).
From a marketing point of view, brand equity is the
measure of customer loyalty to a brand (Brand
Loyalty), (Aaker 1992, 1996).
Brand equity is the description of the product image
that customers (real and prospect) hold (Brand
Image) From the production point of view,

Brand Equity = Brand Value + Brand Loyalty + Brand Image

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 Customer based brand equity
Formally define customer based brand equity as “The
differential effect that brand knowledge has on
consumer response to the marketing of that brand.”
(Keller 1993)

Differential effect
Differences in consumer response
Brand knowledge
A result of consumers’ knowledge about the brand.
(Brand knowledge consists of all the thoughts,
feelings, images, experience, belief)
Consumer response to marketing
Choice of a brand
Recall of copy points from an ad
Response to a sales promotion
Evaluations of a proposed brand extension

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 Brand Equity as a “Bridge”
 Reflection of past investments in the marketing of a
brand
Direction for future marketing actions or programs
Customer-based brand equity provides direction and
focus to future marketing activities
Manufactures need to consider there “Expenses” on the
products each year as there “Investments”
“Investments” in terms of; what Consumer learned, felt,

& experienced about the brand.

Brand knowledge has two components: Brand awareness
and Brand image .

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 Brand Equity Models
A number of models of brand equity offer some
different perspectives.
ØBrand Asset Valuator: by Young and Rubicam
(Y&R)
ØBrandz: BrandDynamics Pyramid by Millward
Brown
ØAaker Model: by David Aaker
ØBrand Resonance Model: comprise model based
on customer based brand equity model

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 Young & Rubicam’s Brand Asset
Valuator (BAV)
The most ambitious effort to measure the brand
equity across products, termed the Brand Asset
Valuator , is that of Young & Rubicam ( Y & R )
a major global advertising agency. Based on
research with almost 500,000 consumers in 44
countries.

The Brand Asset Valuator (BAV) is a database of
consumer perception of brands created and managed
by Brand Asset Consulting, a division of Young
& Rubicam Brands to provide information to
enable firms to improve the marketing decision-
making process and to manage brands better

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 Brand Asset Valuator (BAV) conti..
There are five key components of brand health in BAV
— The Five Pillars.
Each pillar is derived from various measures that
relate to different aspects of consumers’ brand
perceptions and that together trace the progression
of a brand’s development.
ØDifferentiation
ØEnergy
ØRelevance
ØEsteem
ØKnowledge


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 What Does Each Pillar Means
ØDifferentiation : Measures the degree to which a
brand is seen as different from others. This is a
necessary condition for profitable brand building.
Ø Differentiation is the ability for a brand to be
distinguished from its competitors. A brand should be
as unique a possible. Brand health is built, and
maintained by offering a set of differentiating
promises to consumers. And by delivering those
promises to leverage value.
Ø
ØEnergy : Measures the brand’s ability to meet future
Ø
consumer needs and attract new customers. Measure
through out the process.
ØRelevance : Relevance is the actual and perceived
importance of the brand to a large consumer market
segment.
ØThis gauges the personal appropriateness of a brand to
consumers and is strongly tied to household penetration
(the percentage of households that purchase the brand).
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Esteem: Esteem is the perceived quality and consumer
perceptions about the growing or declining
popularity of a brand.
Does the brand keep its promises?
The consumer’s response to a marketer’s brand building
activity is driven by his perception of two factors:
quality and popularity. Both vary by country and
culture.

ØKnowledge: Knowledge is the extent of the consumer’s
awareness of the brand and understanding its identity.
ØThe awareness levels about the brand, and what it
means, shows the intimacy that consumers share with
the brand. True knowledge of the brand comes through
building of the brand.
Ømeasures how familiar and intimates consumers are
with the brand


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

BrandAsset Valuator

Brand Brand Stature

Strength

Differentiat Esteem Knowledge

Relevance
ion
Leadi Laggi
ng ng
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 Brand Health Is Captured on the PowerGrid
High earnings with
High continuing high
High Potential potential Leadership
Low earning or
Niche High earnings
low potential
(Differentiation and
BRAND STRENGTH

Relevance)

Declining

New Eroded
Seriously
Challenged

Unfocused

Low
BRAND STATURE High
Base: USA Total Adults BAV 2000 (Esteem
Prepared and
by Dr. Pooja Knowledge)
Sharma slides- 1-58 28
 The PowerGrid


Brands Strength

Brands Stature

Source:http://www.brandassetconsulting.com/
site_pages/powergrid# Prepared by Dr. Pooja Sharma slides- 1-58 29
 Brandz: BrandDynamics Pyramid
 According to the this model brand building follows a
sequential series of steps, each contingent upon
successfully accomplishing the preceding one.
 The Brand Dynamics model adopts a hierarchical
approach to determine the strength of relationship a
consumer has with a brand.
 The five levels of the model are:
1. Presence

2. Relevance

3. Performance

4. Advantage

5. Bonding

§ The consumer are placed into one of the five

levels depending on their brand responses.
§ By comparing the pattern across brands, it is easy
to uncover relative strengths and weakness and
where brands can focus their efforts to improve.

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 Brand Equity

Nothing else beats it Bonding

Strong relationship/ high share of categor

Advantage
es it offer something better than others

Can it deliver? Performance

Does it offer me something Relevance

Do I know about it Presence

Weak relationship/Low share of catego

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 Aaker Model
David Aaker view brand equity as the brand awareness,
brand loyalty and brand association that combine to add to
or subtract from the values provided by product or
services.
Aaker mentioned that brand management starts with brand
identity . (a unique set of brand associations that
represent that what the brand stands for and
promises to customers.
Brand identity is typically 8 - 12 elements that
represents concepts such as Product scope ,
product attributes , quality / value , uses , users ,
country of origin , organizational attributes ,
brand personality and symbols.
Aaker maintains that the identity should be
differentiating on some dimensions, suggest parity on
others.
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 Brand Resonance Model
Brand building as an ascending series of steps, from
bottom to top. the power of a brand resides on the
mind of the customer.
According to the model, enacting the four steps means
establishing a pyramid of six brand building blocks
with customers. These six building blocks must be
laid in a sequence of four steps to build strong
brand equity.
Each step may be undertaken only after the goals of
the preceding steps have been achieved.
Establish Six Brand building blocks with customer
that can assemble in Pyramid.
 Rational Route
 Emotional Route

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

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Brand Equity - Resonance Model

RESONANCE

JUDGMENTS FEELING
S

PERFORMANCE IMAGERY

SALIENCE

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
Brand Salience
Brand salience measure awareness of the brands.Brand
salience relates to the ease with which the brand comes
to mind under different situations; to brand awareness

Brand Perfor mance
While Salience is important, it is usually not
sufficient to build brand equity.
How well the product or service meets customers’
functional needs
Product reliability, durability, and serviceability,
Service effectiveness, efficiency, and empathy, Style
and design, Price

Brand Imagery
Brand Imagery depends on the extrinsic properties of
the product & service.
Imagery deals with the intangible brand attributes.
Individuals look to these intangibles to satisfy
psychological and social needs.


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 Promotion campaign:
Cadbury Vintage pack: Celebrating 100 years

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7
Brand Judgments


Customer may make all types of judgment with respect

to brand.


Brand Feelings:


Brand evoke feelings in individuals about themselves

and about their image in their social circles.
Transformational advertising seeks to leverage such
emotions to influence users perception of their
actual usage experience.
Br and Resonance


Refers to the nature of the relationship customers

have with the brand and the extent they feel they’re
“in sync” with it. Brand loyalty.


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 1. What is Brand Equity
 The role of brands
 The scope of branding
 Defining Brand equity
 Brand equity as a bridge
 Brand equity Models
Session Plan

2. Building Brand equity

Choosing brand elements
Designing holistic marketing activities
Leveraging secondary associations
3. Measuring &Managing Brand equity
Brand Valuation
Brand reinforcement
Brand revitalization
4. Devising a branding strategy
Branding decisions
Brand extension
Brand portfolios

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

2.Designing Holistic Marketing Activities: the products and

services and all accompanying marketing
activities .

3.Leveraging Secondary Association: Other associations

indirectly transferred to the brand by
linking it Prepared
to some other
by Dr. Pooja entity
Sharma slides- 1-58 . 40
 1. Choosing the Brand Elements
Brand elements sometimes called brand identities, are
those trademarkable devices that serve to identify
and differentiate the brand.
The main ones are brand names, URL’s, Logos, symbols,
characters, spokespeople, Slogan, jingles, packages and
signage.
Memorability
Marketer’s offensive strategy
Meaningfulness and build brand equity
Likability
Transferability
Adaptability
Defensive role for leveraging and
Protectability maintaining brand equity


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
Memorability


Necessary condition for



building brand equity is

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

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Meaningful


Brand elements may take on all kinds

of meaning, with either descriptive
or persuasive content.
Two particularly important criteria
ØGeneral information about the
nature of the product category
ØSpecific information about
particular attributes and
benefits of the brand
The first dimension is an important
determinant of brand awareness and
salience; the second, of brand image
and positioning.
Maggi Atta Noodels

Pond’s Age Miracle

Diapers: pampers

Fair & Lovely


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
 
Likable
 Is it likable visually, verbally, and in other
ways
 Do customers find the brand element
aesthetically appealing?
 Aesthetically Strategy: the strategy planning
and implementation of identify elements that
provide sensory experience
 Descriptive and persuasive elements reduce the
burden on marketing communications to build
awareness.

ent for line or category extensions?
d element add to brand equity across geographic boundaries an

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

Protectible
Legally – registered trade mark
Competitively
Name that become synonymous with product
categories. Xerox.
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 2. Designing Holistic Mar keting
Activities.
Customers come to know about a brand through a range
of contact and touch points.
Marketers are creating brand contacts and building
brand equity through many avenues.
Personalization : personalizing marketing is
about making sure the brand and its marketing
are as relevant as possible to as many
customers as possible .
Integration : Emphasis on integration

Marketing . Mixing and matching marketing

activities to maximize their individual and
collective effects . Brand identity & brand
Image .
Internalization : Must adopt an internal

perspective to be sure employees and

marketing partners appreciate and understand
basic branding notions and how they can
help / hurt brand equity .
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 3. Leveraging Secondar y
Associations
Linking the brand to some other entity -some source
factor or related person, place, or thing may create
a new set of associations from the brand to the
entity as well as affecting existing brand
associations”
 Brand associations may themselves be linked
to other entities , creating secondary
associations :
ØCompany ( through branding strategies)
ØCountry of origin (through identification of
product origin)
ØChannels of distribution (through channels
strategy)
ØCo - branding
ØSpecial case of co-branding is ingredient
branding
ØCharacters (through licensing)
ØCelebrity endorsement
ØEvents (through sponsorship)
ØOther third - party
Prepared by sources
Dr. Pooja Sharma slides- 1-58 (through awards 47
3. Lever aging Secondar y Associations

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

Prepared by Dr. Pooja Sharma slides- 1-58 49

 1. What is Brand Equity
 The role of brands
 The scope of branding
 Defining Brand equity
 Brand equity as a bridge
 Brand equity Models
Session Plan

2. Building Brand equity

Choosing brand elements
Designing holistic marketing activities
Leveraging secondary associations
3. Measuring &Managing Brand equity
Brand Valuation
Brand reinforcement
Brand revitalization
4. Devising a branding strategy
Branding decisions
Brand extension
Brand portfolios

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 Measuring Brand Equity
 Brand Audit: A brand audit is a consumer focused
series of procedures to assess the health of the
Brand Audits brand.
 Marketers should conduct brand audits whenever
there is major shift in strategic direction, change

Brand trackingcollect quantitative data from

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

Brand Valuation: differ from brand equity.

Brand valuation: Estimating the total financial value
Brand Valuation
of the brand
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http://www.millwardbrown.com/sites/optimor/Media/Pdfs/en/BrandZ/BrandZ-2009-Report.p
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 Managing Brand equity Case Study:
Long term view of marketing actions Nivea
Brand equity is reinforced by marketing
actions that consistently convey the
nd Reinforcement meaning of the brand in terms of
What product the brand represents, core
benefits, what need it satisfies.
Reinforcing brand equity requires
innovation and relevance throughout the
marketing program.

Changes in consumers tastes and

preferences, the emergence of new
competitors or new development can affect
d Revitalization the brand fortune.
Marketers need manage their brands
fortune.
Do revitalizing a brand is to understand
what source of brand equity to begin with
Lambretta, Premier Padmini, Ambassador: brand
that once dominated their respective markets. 53
Prepared by Dr. Pooja Sharma slides- 1-58
 1. What is Brand Equity
 The role of brands
 The scope of branding
 Defining Brand equity
 Brand equity as a bridge
 Brand equity Models
Session Plan

2. Building Brand equity

Choosing brand elements
Designing holistic marketing activities
Leveraging secondary associations
3. Measuring &Managing Brand equity
Brand Valuation
Brand reinforcement
Brand revitalization
4. Devising a branding strategy
Branding decisions
Brand extension
Brand portfolios

Prepared by Dr. Pooja Sharma slides- 1-58 54

 Devising a Branding Strategy
Branding strategy
reflect the number
Develop new brand elements and nature of both
common and
distinctive brand
elements.
Apply existing brand elements

Important : deciding
ho to brand new
Use a combination of product is especially
old and new critical.

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 Branding decisions
Individual names

Companies often use different brand names for different

quality lines within the same product class.
P&G: Vicks (Health Care),Whisper (Feminine Hygiene) ,head
&Shoulders (hair care)etc.
HUL: Dove, Lux, Fair &Lovely, Cif

Blanket family names

The name of company is used in diverse product category.

Family brands are brands applied across a range of
product categories.
Development costs are lower with blanket names because
there’s no need to run “name” research or spend heavily.
TATA follow this policy : TATA Salt, TATA Tea
ConAgra’s healthy family brand appears on a wide spectrum
of food products.
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Separate family names

In this category firm uses separate family names for

its various products.
Aditya Birla: Ultra Tech, Hindalco Aluminium, Madura
Garment.etc

Corporate name - individual name combo

In this category firm combines corporate and

individuals names .
Nestle’s Kitkat,
Nestle' Perk
Nescafe
Kellogg’s raisin bran, Kellogg’s cornflakes
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 Brand Extension
 When a firm uses an established brand name to introduce a new product.
Brand extension classification
 Line extension
 Using a sub-brand to target a new market segment within the
same product category
 Category extension
 Using the parent brand in a different product category

Brand Portfolio
Reason to brand portfolio
Increasing shelf presence and retailer dependence in the store
Attracting consumers seeking variety
Increasing internal competition within the firm
Yielding economies of scale in advertising, sales, merchandising,
and distribution , Brand can plays roles as part of portfolio.
Flankers, Cash Cows, Low end Entry Level, High End Prestige
 Prepared by Dr. Pooja Sharma slides- 1-58 58