BUILDING STRONG BRANDS

What is Brand Equity?

 The American Marketing Association
defines a brand as “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.”
Branding has been around the centuries as a means to
distinguish the goods of one producer from those of
another. Earliest sign in Europe: The Medieval guilds
requires the craftspeople to put trademarks on their
product to protect themselves and their customer against
inferior quality. In fine arts: branding began with artists
signing their works
THE ROLE OF BRANDS
•Brands identify the source or maker of a product and allow
consumers- either individual or organizations- to assign
responsibility for its performance to a particular manufacturer or
distributor.

•Consumer may evaluate the identical product differently

depending on how its is branded.

•As consumers lives become more complicated, rushed, and time

starved, the ability of a brand to simplify decision making and
reduce risks is invaluable.

• The brand name can be protected through register trademark;

manufacturing processes can be protected through patents; and
packaging can be protected through copy rights and proprietary
designs.
The Scope of Branding
• Branding is endowing products and services with the
power of a brand.

• Branding creates mental structures that help consumers

organize their knowledge about product and services in a
way that clarifies their decision making and, in the process,
provides value to the firm.
Defining Brand Equity
 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.
 Customer - based brand equity
is the differential effect that brand
knowledge has on consumer
response to the marketing of that
brand.
 A brand has positive customer-based brand
equity when consumers react more favorably to a
product and the way it is marketed when the brand
is identified, than when it is not identified. A brand
has negative customer-based brand equity if
consumers react less favorably to marketing
activity for the brand under the same
circumstances.
Three key ingredients of
customer-based brand equity;
 First, brand equity arises from differences
in consumer response. If no differences occur,
then the brand name product is essentially a
commodity or generic version of the product.
Competition will probably be based on price.
 Second, differences in response are a result of
consumer's knowledge about the brand. Brand knowledge
consists of all the thoughts, feelings, images, experiences,
beliefs, and so on that become associated with the brand.
In particular, brand must create strong, favorable, and
unique brand associations with customers, as have Volvo
(safety), Hallmark (caring), and Harley-Davidson
(adventure).
 Third, the differential response by consumers that
makes up brand equity is reflected in perceptions,
preferences, and behavior related to all aspects of the
marketing of a brand. Stronger brands lead to greater
revenue.
 The challenge for marketers in building a strong
brand is therefore ensuring that customers have the
right type of experiences with products, services and
their marketing programs to create the desired brand
knowledge.
Brand Equity as a Bridge
Brand promise is the marketer's vision
of what the brand must be and do for
consumers.
Brand Equity Models
•Differentiation - measures the degree to which a brand is seen as different
from others.
•Energy - measures the brand sense of momentum.
•Relevance - measures the breadth of brand's appeal.
•Esteem - measures the how well the brand is regarded and respected.
•Knowledge - measures how familiar and intimate consumers are with the
brand.

Differentiation, Energy and Relevance combine to determine

Energized Brand Strength. Esteem and Knowledge create Brand
Stature, which is more of “report card” on the past performance.
Brand Resonance Model

The brand resonance model also views brand building as an ascending

series of steps, from bottom to top:
(1) ensuring identification of the brand with customers and an association
of the brand in customers' minds with a specific product class or customer need;
(2) firmly establishing the totality of brand meaning in the minds of
customers by strategically linking a host of tangible and intangible brand
associations;
(3) eliciting the proper customer responses in terms of brand-related
judgement and feelings; and
(4) converting brand response to create an intense, active loyalty
relationship between customers and the brand.
 According to this model, enacting the four steps means
establishing a pyramid of six “brand building blocks” with
customers, as illustrated in Figure 9.4. The model
emphasizes the duality of brands--the rational route to brand
building is the left-hand side.
Stages of Brand Development Brand Brand Building Branding Objective at
Blocks Each Stage

4. Relationship = | FIG. 9.4 | Intense,

What about you and me? Brand Resonance Pyramid active loyalty

Resonance

3. Response = Positive,
What about you? accessible reactions
Judgments Feelings

2. Meaning = Performance Imagery Points-of-parity

What are you? & difference

1. Identity = Salience Deep, broad

Who are you? brand awareness
 The creation of significant brand equity requires reaching the top or
pinnacle of the brand pyramid, which occurs only if the right building blocks are
put into place.

▪ Brand salience is how often and how easily customers think of the brand
under various purchase or consumption situations.
▪ Brand performance is how well the product or service meets customers'
functional needs.
▪ Brand imagery describes the extrinsic properties of the product or service,
including the ways in which the brand attempts to meet customers' psychological or
social needs.
▪ Brand judgments focus on customers' own personal opinions and
evaluations.
▪ Brand feelings are customers' emotional responses and reactions with
respect to the brand.
▪ Brand resonance refers to the nature of the relationship customers have with
the brand and the extent to which they feel they're “in sync” with it.
 Resonance is the intensity or depth of the psychological
bond customers have with the brand, as well as the level of
activity engendered by this loyalty. Brands with high resonance
include Harley-Davidson, Apple, and eBay. Fox news has found
that the higher levels of resonance and engagement its
programs engender often leads to greater recall of the ads it
runs.
Building Brand Equity
 Marketers build brand equity by creating the right brand
knowledge structures with the right consumers. This process
depends on all brand-related contacts--whether marketer initiated
or not. From a marketing management perspective, however, there
are three main sets of brand equity drivers:

1. The initial choices for the brand elements or identities

making up the brand (brand names, URLs, logos, symbols,
characters, spokespeople, slogan, 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)
Choosing Brand Elements
 Brand elements are those trademarkable devices that identify and
differentiate the brand. Most strong brands employ multiple brand elements.
Nike has the distinctive “swoosh” logo, the empowering “Just Do It” slogan,
and the “Nike” name based on the winged goddess of victory.

Marketers should choose brand elements to build as much brand

equity as possible. The test of the brand-building ability of these elements is
what consumers would think or feel about the product if the brand element
were all they knew. A brand element that provide a positive contribution to
brand equity.
Brand Element Choice Criteria
There are six main criteria for choosing brand elements. The first three-- memorable,
meaningful, and likeable--are “brand building”. The latter three-- transferable, adaptable, and protectable-
- are “defensive” and deal with how to leverage and preserve the equity in a brand element in the face of
opportunities and constraints.

1. Memorable - How easily is the brand element recalled and recognized? Is this true at both
purchase and consumption? Short names such as Tide, Crest, and Puffs are memorable brand elements.
2. Meaningful - Is the brand element credible and suggestive of the corresponding category?
Does it suggest something about a product ingredients or the type of person who might use the brand?
Consider the inheret meaning in names such as DieHard auto batteries, Mop & Glo floor wax, and Lean
Cuisine low-calorie frozen entrees.
3. Likeable - How aesthetically appealing is the brand element? Is it likeable visually, verbally,
and in other ways? Concrete brand names such as Sunkist, Spic and Span, and Jaguar evoke much
imagery.
 4. Transferable - Can the brand element be used to introduce new products in the
same or different categories? Does it add to brand equity across geographic boundaries and
market segments? Although initially an online book seller, Amazon.com was smart enough
not to call itself “Books 'R' Us.” The Amazon is famous as the world's biggest river, and the
name suggests the wide variety of goods that could be shipped, an important descriptor of
the diverse range of products the company now sells.
5. Adaptable - How adaptable and updatable is the brand element? The face of
Betty Crocker, the invented persona and brand name of the U.S. food manufacturer General
Mills, has received more than eight makeovers over her 75 years and she doesn't look a day
over 35!
6. Protectible - How legally protectible is the brand element? How competitively
protectible? Names that become synonymous with product categories--such as Kleenex,
Kitty Litter, Jell-O, Scotch Tape, Xerox, and Fiberglass--should retain their trademark rights
and not become generic.
Developing Brand Elements
Brand elements can play a number of brand-building roles. If
consumers don't examine much information in making their product decisions,
brand elements should be easy to recognize and recall and inherently
descriptive and persuasive. The likability and appeal of brand elements may
also play a critical role in awareness and associations leading to brand equity.
Designing Holistic Marketing Activities

Brand are not built by advertising alone. Customers come to

know a brand through a range of contacts and touch points: personal
observation and use, word of mouth, interactions with company
personnel, online or telephone experiences, and payment transactions.
A brand contact is any information-bearing experience, whether
positive or negative, a customer or prospect has with the brand, the
product category, or the market that relates to the marketer's product
or service. The company must put as much effort into managing these
experiences as into producing its ads.
Designing Holistic Marketing Activities
PERSONALIZATION
The rapid expansion of the Internet has created opportunities to
personalize marketing. Marketers are increasingly abandoning the mass-
market practices that built brand powerhouses in the 1950s, 1960s, and
1970s for new approaches that are in fact a throwback to marketing
practices from a century ago, when merchants literally knew their
customers by name. Personalizing marketing is about making sure the
brand and its marketing are as relevant as possible to as many customers
as possible--a challenge, given that no two customers are identical.
Designing Holistic Marketing Activities
Permission marketing, the practice of marketing to consumers only
after gaining their express permission, is based on the premise that
marketers can no longer use “interruption marketing” via mass-media
campaigns. According to Seth Godin, a pioneer in the technique,
marketers can develop stronger consumer relationships by respecting
consumers' wishes and sending messages only when they express a
willingness to become more involved with the brand. Godin believes
permission marketing works because it is “anticipated, personal, and
relevant.”
Designing Holistic Marketing Activities

INTEGRATION
The traditional “marketing-mix” concept and the notion of the “four
Ps” do not adequately describe modern marketing programs.
Integration marketing is about mixing and matching marketing
activities to maximize their individual and collective effects. To achieve it,
marketers need a variety of different marketing activities that reinforce
the brand promise. We can evaluate all integrated marketing activities in
terms of the effectiveness and efficiency with which they affect brand
awareness and create, maintain, or strengthen brand image.
Designing Holistic Marketing Activities
INTERNALIZATION
Marketers must now “walk the walk” to deliver the brand promise.
They must adopt an internal perspective to be sure employees and
marketing partners appreciate and understand basic branding notions and
how they can help--or hurt--brand equity. Internal branding is activities
and processes that help to inform and inspire employees. It is critical for
service companies and retailers that all employees have an up-to-date,
deep understanding of the brand and its promise.
Designing Holistic Marketing Activities
Brand bonding occurs when customers experience the company as delivering on its
brand promise. All the customers' contacts with company employees and company
communications must be positive. The brand promise will not be delivered unless everyone
in the company lives the brand. When employees care about and believe in the brand,
they're motivated to work harder and feel greater loyalty to the firm . Some important
principles for internal branding are:.
1. Choose the right moment - Turning points are ideal opportunities to capture
employees' attention and imagination.
2. Link internal and external marketing - Internal and external messages must
match
3. Bring the brand alive for employees - A professional branding campaign should
be based on marketing research and supervised by the marketing department. Internal
communications should be informative and energizing.
 Measuring Brand Equity
Given that the power of a brand resides in the minds of consumers
and the way it changes their response to marketing, there are two basic
approaches to measuring brand equity.
▪An indirect approach assesses potential sources of brand equity by
identifying and tracking consumer brand knowledge structures.
▪A direct approach assesses the actual impact of brand knowledge on
consumer response to different aspects of the marketing.

The brand value chain is structured approach to assessing the sources

and outcomes of brand equity and the manner in which marketing activities
create brand value.
Brand Valuation
Marketers should distinguish brand equity from brand valuation, which is
the job of estimating the total financial value of the brand. Table 9.2 displays the
world's most valuable brands in 2006 according to one ranking. In these well-known
companies, brand value is typically over half the total company market
capitalization. John Stuart, cofounder of Quaker Oats, said: “If this business were
split up, I would give you the land and bricks and mortar, and I would take the
brands and trademarks, and I would fare better than you.” US companies do not list
brand equity on their balance sheets because of the arbitrariness of the estimate.
However, brand equity is given a value by some companies in the United Kingdom,
Hong Kong, and Australia. “Marketing Insight: What is a Brand Worth?” reviews one
popular valuation approach.
Managing Brand Equity
Effective brand management requires a long-term view of
marketing actions. Because consumer responses to marketing
activity depend on what they know and remember about a brand,
short-term marketing actions, by changing brand knowledge,
necessarily increase or decrease the long-term success of future
marketing actions.
Top Brand Management Firm
Five Process
1. Market Segmentation- 1st step in the brand valuation process is to divide the markets in which the brand
is sold into mutually exclusive segments of customers that help to determine the variances in the brand
economic value

2. Financial Analysis- Interbrand assesses purchase price, volume, and frequency to help calculate accurate
forecasts of future brand sales and revenues.

3. Role of Branding- The role of Branding assessment is based on market research, client work shops, and
interviews and represents the percentage of intangible earnings the brand generates

4. Brand Strength- Interbrand assesses the brands strength profile to determine the likelihood that the brand
will realize forecast earnings.

5. Brand Value Calculation- brand value is the net present value of the forecast brand earnings, discounted
by the brand discount rate
Brand Revitalization
Changes in consumer tastes and preferences, the
emergence of new competitors or new technology, or any new
development in the marketing environment can affect the fortunes
of a brand.
Devising a Branding Strategy
A firm's branding strategy reflects the number and nature of
both common and distinctive brand elements it applies to the product it sells.
Deciding how to brand new product is especially critical. When a firm
introduces a new product, it has three main choices:

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 and existing brand elements.
 When a firm uses an established brand to introduce a new product,
the product is called a brand extension. When marketers combine a new
brand with an existing brand, the brand extension can also be called a
subbrand. The existing brand that gives birth to a brand extension or
subbrand is the parent brand. If the parent brand is already associated with
multiple products through brand extensions, it can also be called a family
brand.
Brand extensions fall into two general categories: In a line extension,
the parent brand covers a new product within a product category it currently
serves, such as with new flavors, forms, colors, ingredients, and package
sizes. In a category extension, the parent brand is used to enter a different
product category from the one it currently serves.
 A brand line consists of all products--original as well as line and
category extensions--sold under a particular brand. A brand mix (or brand
assortment) is the set of all brand lines that a particular seller makes
available to buyers. Many companies are now introducing branded
variants, which are specific brand lines supplied to specific retailers or
distribution channels.
A licensed product is one whose brand name has been licensed to
other manufacturers that actually make the product.
Branding Decisions
The first branding strategy decision is whether to develop a brand name for a
product. Today, branding is such a strong force that hardly anything goes unbranded.
Assuming a firm decides to brand its product or services, it must then choose which brand
names to use.

Four general strategies are often used:

▪Individual names
▪Blanket family names
▪Separate family names for all products
▪Corporate name combined with individual product names
Customer Equity
▪ Acquisition is affected by the number of prospects, the acquisition
probability of a prospect, and acquisition spending per prospect.
▪ Retention is influenced by the retention rate and retention spending
level.
▪ Add-on spending is a function of the efficiency of add-on selling, the
number of add-on selling offers given to existing customers, and the response rate
to new offers.
THANKYOU!