Module 2

Brand Equity

Band Identity

Brand Positioning

Module 2

Brand Equity

Band Identity

Brand Positioning

STRATEGIC BRAND STRATEGIC BRAND STRATEGIC BRAND STRATEGIC BRAND

MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENT

STRATEGIC BRAND STRATEGIC BRAND STRATEGIC BRAND STRATEGIC BRAND

MANAGEMENTMANAGEMENTMANAGEMENTMANAGEMENT

Importance of Brand Importance of Brand

• Brand gives a unique identity to a Product

• The brand can add significant value when it

is well recognized and has positive

associations in the mind of the consumer

• When developing a new product, branding is

an important decision

• The power of a brand lies in what resides in

the minds of customers – what they learned,

felt, seen, and heard about the brand as a

result of their experiences over time. This

intangible asset is known as Brand EquityBrand EquityBrand EquityBrand Equity.

• Brand gives a unique identity to a Product

• The brand can add significant value when it

is well recognized and has positive

associations in the mind of the consumer

• When developing a new product, branding is

an important decision

• The power of a brand lies in what resides in

the minds of customers – what they learned,

felt, seen, and heard about the brand as a

result of their experiences over time. This

intangible asset is known as Brand EquityBrand EquityBrand EquityBrand Equity.

Brand Equity - PerspectivesBrand Equity - Perspectives

The brand equity brand equity brand equity brand equity refers to an intangible asset that

depends of the consumer associations. There are

3 perspectives from witch this concept can be

analyzed:

• Financial perspectiveFinancial perspectiveFinancial perspectiveFinancial perspective. A method of evaluating the

brand equity is determining the premium price

witch a brand has for a generic product

• Brand extensionsBrand extensionsBrand extensionsBrand extensions: A successful brand can be used

for launching additional brands related to that

one.

• Starting with the consumer.Starting with the consumer.Starting with the consumer.Starting with the consumer. A powerful brand

encourages the positive attitude of the consumer

over the product

The brand equity brand equity brand equity brand equity refers to an intangible asset that

depends of the consumer associations. There are

3 perspectives from witch this concept can be

analyzed:

• Financial perspectiveFinancial perspectiveFinancial perspectiveFinancial perspective. A method of evaluating the

brand equity is determining the premium price

witch a brand has for a generic product

• Brand extensionsBrand extensionsBrand extensionsBrand extensions: A successful brand can be used

for launching additional brands related to that

one.

• Starting with the consumer.Starting with the consumer.Starting with the consumer.Starting with the consumer. A powerful brand

encourages the positive attitude of the consumer

over the product

Brand Equity - CriteriaBrand Equity - Criteria

The brand equity represents the value of a brand, which is established by the following criteria:

• the level of loyalty towards the brand the level of loyalty towards the brand the level of loyalty towards the brand the level of loyalty towards the brand

• the fame of the name the fame of the name the fame of the name the fame of the name

• the perceived quality the perceived quality the perceived quality the perceived quality

• strong associations with the respective strong associations with the respective strong associations with the respective strong associations with the respective brand brand brand brand

• other possession of the brand: patents, other possession of the brand: patents, other possession of the brand: patents, other possession of the brand: patents, registered marks, relations in the registered marks, relations in the registered marks, relations in the registered marks, relations in the distribution channelsdistribution channelsdistribution channelsdistribution channels

The brand equity represents the value of a brand, which is established by the following criteria:

• the level of loyalty towards the brand the level of loyalty towards the brand the level of loyalty towards the brand the level of loyalty towards the brand

• the fame of the name the fame of the name the fame of the name the fame of the name

• the perceived quality the perceived quality the perceived quality the perceived quality

• strong associations with the respective strong associations with the respective strong associations with the respective strong associations with the respective brand brand brand brand

• other possession of the brand: patents, other possession of the brand: patents, other possession of the brand: patents, other possession of the brand: patents, registered marks, relations in the registered marks, relations in the registered marks, relations in the registered marks, relations in the distribution channelsdistribution channelsdistribution channelsdistribution channels

Elements of Brand EquityElements of Brand Equity

Input Models of Brand EquityInput Models of Brand Equity

• Favourability of Attitudes with

the brand name

• Familiarity with the brand

name

• Image profile

• Perceptual maps

• Preference

• Behavioral models

• Favourability of Attitudes with

the brand name

• Familiarity with the brand

name

• Image profile

• Perceptual maps

• Preference

• Behavioral models

Brand Equity is built upon the

Brand Identity

Brand Equity is built upon the

Brand Identity

Favourable Attitudes and Familiarity

Attitudes++ - -

Familiarity

++

--

Brand CCCC

Brand BBrand BBrand BBrand B

Brand A

Brand DBrand DBrand DBrand D

Is this everpossible ?

Image profile of the brandImage profile of the brand

Criteria 1

Criteria 2

Criteria 3

Criteria ... n

+++ - - -A B C

Brand+

Product

Perceptual MapsPerceptual Maps

A car prestigiousto own

Low

A financially effective car

Low High

* Mercedes

BMW*

* Jaguar

Toyota(Lexus)*

* Alfa

*Volvo

Honda*

* Audi

*Saab

Prestige cars Prestige cars Prestige cars Prestige cars

amongamongamongamong managersmanagersmanagersmanagersHigh

Preference ModelsPreference Models

100 %

70%

25%

15%

0

Knowers 15% 0

Non-K

nowers

PreferersPreferersPreferersPreferers

IndifferentsIndifferentsIndifferentsIndifferents

RejectorsRejectorsRejectorsRejectors

Behavioral modelsBehavioral modelsBrand A Brand B

Aware

Positive

Triers

Satisfied

Repurchase

Total market Which isstrongest ?

• What we must know?

• On what criteria is Brand strengthmeasured ?

• Where do we stand in the brand building continuum ?

Two Approaches

• Customer approach : Keller

• General « Market » approach : Aaker

•• WhatWhat wewe must must knowknow??

•• On On whatwhat criteriacriteria isis Brand Brand strengthstrengthmeasuredmeasured ??

•• WhereWhere do do wewe stand in stand in thethe brand brand building continuum ?building continuum ?

TwoTwo ApproachesApproaches

• Customer approach : Keller

• General « Market » approach : Aaker

Evaluating Brand EquityEvaluating Brand Equity

Customer-Based Brand EquityCustomer-Based Brand Equity

According to Keller

• Marketers know strong brands are important but aren’t always sure how to build one.

• CBBE model was designed to be …– comprehensive comprehensive comprehensive comprehensive

– cohesive cohesive cohesive cohesive

– wellwellwellwell----grounded grounded grounded grounded

– upupupup----totototo----datedatedatedate

– actionableactionableactionableactionable

According to Keller

• Marketers know strong brands are important but aren’t always sure how to build one.

• CBBE model was designed to be …– comprehensive comprehensive comprehensive comprehensive

– cohesive cohesive cohesive cohesive

– wellwellwellwell----grounded grounded grounded grounded

– upupupup----totototo----datedatedatedate

– actionableactionableactionableactionable

Rationale of CBBERationale of CBBE

• Basic premise: Power of a brand resides in the minds of customers

• Challenge is to ensure customers have the right types of experiences with products & services and their marketing programs to create the right brand knowledge structures:– Thoughts

– Feelings

– Images

– Perceptions– Attitudes

• Basic premise: Power of a brand resides in the minds of customers

• Challenge is to ensure customers have the right types of experiences with products & services and their marketing programs to create the right brand knowledge structures:– Thoughts

– Feelings

– Images

– Perceptions– Attitudes

Building a CBBE ModelBuilding a CBBE Model

• Building a strong brand involves a series of steps as part of a “branding ladder”

• A strong brand is also characterized by a logically constructed set of brand “building blocks.”

– Identifies areas of strength and weakness

– Provides guidance to marketing activities

• Building a strong brand involves a series of steps as part of a “branding ladder”

• A strong brand is also characterized by a logically constructed set of brand “building blocks.”

– Identifies areas of strength and weakness

– Provides guidance to marketing activities

Steps of CBBE ModelSteps of CBBE Model

• The Customer-Based Brand Equity (CBBE) model identifies four steps which denote questions asked by customers, and represent a ‘branding ladder’, with each step dependent on achieving the previous one

• These steps consist of six brand building blocks, with a number of sub-dimensions

• To build a strong brand, the aim is to reach the pinnacle of the pyramid where a harmonious relationship exists with customers

• The Customer-Based Brand Equity (CBBE) model identifies four steps which denote questions asked by customers, and represent a ‘branding ladder’, with each step dependent on achieving the previous one

• These steps consist of six brand building blocks, with a number of sub-dimensions

• To build a strong brand, the aim is to reach the pinnacle of the pyramid where a harmonious relationship exists with customers

CBBE PyramidCBBE Pyramid

CBBE Steps CBBE Steps

• The first step of the CBBE model is to ensure the correct ‘brand identity’. Answering the first question customers ask about brands - Who are you? - the purpose is to create an identification of the brand, and an association with a specific product class or need. The initial step consists of the brand building block, ‘salience’.

• The second step answers the customer question - What are you? - by establishing ‘brand meaning’ in their minds, and linking brand associations with certain properties. Two brand building blocks make up this step - ‘performance’ and ‘imagery’.

• The third step is ‘brand response’ whereby the proper customer responses to the brand identification and meaning are elicited. This is achieved with the ‘judgments’ & ‘feelings’ building blocks, - answers the question - What about you?

• ‘Brand relationships’ constitutes the final step in the CBBE pyramid where brand response is converted to an intense, active loyalty relationship between customers and the brand. Addressing the customer question of - What about you and me? -the final brand-building block and the pinnacle of the pyramid is ‘resonance’.

• The first step of the CBBE model is to ensure the correct ‘brand identity’. Answering the first question customers ask about brands - Who are you? - the purpose is to create an identification of the brand, and an association with a specific product class or need. The initial step consists of the brand building block, ‘salience’.

• The second step answers the customer question - What are you? - by establishing ‘brand meaning’ in their minds, and linking brand associations with certain properties. Two brand building blocks make up this step - ‘performance’ and ‘imagery’.

• The third step is ‘brand response’ whereby the proper customer responses to the brand identification and meaning are elicited. This is achieved with the ‘judgments’ & ‘feelings’ building blocks, - answers the question - What about you?

• ‘Brand relationships’ constitutes the final step in the CBBE pyramid where brand response is converted to an intense, active loyalty relationship between customers and the brand. Addressing the customer question of - What about you and me? -the final brand-building block and the pinnacle of the pyramid is ‘resonance’.

Salience DimensionsSalience Dimensions

• Depth of brand awareness

– Ease of recognition & recall

– Strength & clarity of category

membership

• Breadth of brand awareness

– Purchase consideration

– Consumption consideration

• Depth of brand awareness

– Ease of recognition & recall

– Strength & clarity of category

membership

• Breadth of brand awareness

– Purchase consideration

– Consumption consideration

Performance Dimensions Performance Dimensions

• Primary characteristics & supplementary features

• Product reliability, durability, and serviceability

• Service effectiveness, efficiency, and empathy

• Style and design

• Price

• Primary characteristics & supplementary features

• Product reliability, durability, and serviceability

• Service effectiveness, efficiency, and empathy

• Style and design

• Price

Imagery DimensionsImagery Dimensions

User profiles

•Demographic & psychographic

characteristics

•Actual or aspirational

•Group perceptions -- popularity

Purchase & usage situations

•Type of channel, specific stores, ease of purchase

•Time (day, week, month, year, etc.), location, and

context of usage

Personality & values

•Sincerity, excitement, competence, sophistication, &

ruggedness

History, heritage, & experiences

•Nostalgia

•Memories

• Brand quality– Value

– Satisfaction

• Brand credibility– Expertise

– Trustworthiness

– Likability

• Brand consideration– Relevance

• Brand superiority– Differentiation

• Brand quality– Value

– Satisfaction

• Brand credibility– Expertise

– Trustworthiness

– Likability

• Brand consideration– Relevance

• Brand superiority– Differentiation

Judgment DimensionsJudgment Dimensions

• Warmth

• Fun

• Excitement

• Security

• Social approval

• Self-respect

• Warmth

• Fun

• Excitement

• Security

• Social approval

• Self-respect

Feelings DimensionsFeelings Dimensions

• Behavioral loyalty– Frequency and amount of repeat purchases

• Attitudinal attachment– Love brand (favorite possessions; “a little

pleasure”)

– Proud of brand

• Sense of community– Kinship

– Affiliation

• Active engagement– Seek information

– Join club

– Visit web site, chat rooms

• Behavioral loyalty– Frequency and amount of repeat purchases

• Attitudinal attachment– Love brand (favorite possessions; “a little

pleasure”)

– Proud of brand

• Sense of community– Kinship

– Affiliation

• Active engagement– Seek information

– Join club

– Visit web site, chat rooms

Resonance DimensionsResonance Dimensions

Customer-Based Brand Equity ModelCustomer-Based Brand Equity Model

Consumer-

Brand

Resonance

Brand Salience

Consumer

Judgments

Consumer

Feelings

Brand

PerformanceBrand

Imagery

INTENSE, ACTIVE

LOYALTY

INTENSE, ACTIVE

LOYALTY

RATIONAL &

EMOTIONAL

REACTIONS

RATIONAL &

EMOTIONAL

REACTIONS

POINTS-OF-

PARITY &

POINTS-OF-

DIFFERENCE

POINTS-OF-

PARITY &

POINTS-OF-

DIFFERENCE

DEEP, BROAD

BRAND

AWARENESS

DEEP, BROAD

BRAND

AWARENESS

Sub-Dimensions of CBBE Pyramid

LOYALTY

ATTACHMENT

COMMUNITY

ENGAGEMENT

QUALITY

CREDIBILITY

CONSIDERATION

SUPERIORITY

WARMTH

FUN

EXCITEMENT

SECURITY

SOCIAL APPROVAL

SELF-RESPECT

CATEGORY IDENTIFICATION

NEEDS SATISFIED

PRIMARY CHARACTERISTICS &

SECONDARY FEATURES

PRODUCT RELIABILITY,

DURABILITY & SERVICEABILITY

SERVICE EFFECTIVENESS,

EFFICIENCY, & EMPATHY

STYLE AND DESIGN

PRICE

USER PROFILES

PURCHASE & USAGE

SITUATIONS

PERSONALITY &

VALUES

HISTORY, HERITAGE,

& EXPERIENCES

Application:

Identify the key drivers of brand equity

0.17 0.66

0.24

0.65

P-2P-2

PerformancePerformance

P-1

P-1

P-10 P-10

P-7

P-7

P-8

P-8

P-9

P-9

P-3P-3

P-4P-4

P-6

P-6

P-5

P-5

P-11

P-11 P-12

P-12

I-2I-2

I-9I-9

ImageryImagery

I-1I-1

I-3I-3

I-6I-6

I-5I-5

I-10 I-10

I-7

I-7

I-8I-8

I-11

I-11 I-12

I-12

I-4I-4

F-2F-2

FeelingsFeelings

F-1

F-1

F-3F-3

F-4F-4

F-6

F-6

F-5

F-5

F-7

F-7

F-8

F-8

F-9

F-9

F-11

F-11 F-12

F-12

F-10F-10

J-2J-2

JudgmentJudgment

J-1

J-1

J-3J-3

J-4J-4

J-6

J-6

J-5J-5

J-10J-10

J-7

J-7

J-8

J-8

J-9J-9

J-11

J-11 J-12

J-12

R-2R-2

ResonanceResonance

R-1

R-1

R-3R-3

R-4R-4

R-6

R-6

R-5

R-5

R-10 R-10

R-7

R-7

R-8

R-8

R-9

R-9

R-11

R-11 R-12

R-12

0.58

0.49

General « Market » ApproachGeneral « Market » Approach

AAKER’S MODEL

• David Aaker views brand equity as a set of 5 categories of assets & liabilities linked to brand that add or subtract from the value provided by the product or service to firm and/or to the firm’s customers:

1. Brand loyalty2. Brand awareness 3. Perceived quality4. Brand association5. Other proprietary assets (patents, trademarks,

channel relationships)

AAKER’S MODEL

• David Aaker views brand equity as a set of 5 categories of assets & liabilities linked to brand that add or subtract from the value provided by the product or service to firm and/or to the firm’s customers:

1. Brand loyalty2. Brand awareness 3. Perceived quality4. Brand association5. Other proprietary assets (patents, trademarks,

channel relationships)

LOYALTYLOYALTY

AWARENESSAWARENESS

QUALITYQUALITY

IMAGE & ASSN.IMAGE & ASSN.

PROPERTYPROPERTY

BRANDBRAND

STRENGTHSTRENGTH(EQUITY)(EQUITY)

VALUE FOR VALUE FOR

THE THE

COSTUMERCOSTUMER

VALUEVALUE

FOR THEFOR THE

FIRMFIRM

PREFERENCE

Brand IdentityBrand Identity

• Brand identity is a unique set of brand associations that the brand strategist aspires to create or maintain

• These associations represent what the brand stands for & imply a promise to customers from the organization members

• Brand identity should help establish a relationship between the brand & the customer by generating a value proposition involving functional, emotional, or self-expressive benefits

• Brand identity is a unique set of brand associations that the brand strategist aspires to create or maintain

• These associations represent what the brand stands for & imply a promise to customers from the organization members

• Brand identity should help establish a relationship between the brand & the customer by generating a value proposition involving functional, emotional, or self-expressive benefits

Value Proposition of a BrandValue Proposition of a Brand

Example: McDonald’s outlets

• Functional benefits: good-tasting hamburgers, fries, & drinks that provide value, extras such as play grounds, prizes, premiums, & games

• Emotional benefits:– KidsKidsKidsKids –––– fun via excitement of birthday parties, fun via excitement of birthday parties, fun via excitement of birthday parties, fun via excitement of birthday parties, relationship with Ronald McDonald & other relationship with Ronald McDonald & other relationship with Ronald McDonald & other relationship with Ronald McDonald & other characters, & feeling of special family times characters, & feeling of special family times characters, & feeling of special family times characters, & feeling of special family times – AdultsAdultsAdultsAdults –––– warmth via link to family events & warmth via link to family events & warmth via link to family events & warmth via link to family events & experiences reinforced by the McDonaldexperiences reinforced by the McDonaldexperiences reinforced by the McDonaldexperiences reinforced by the McDonald’’’’s s s s emotional advertisingemotional advertisingemotional advertisingemotional advertising

Example: McDonald’s outlets

• Functional benefits: good-tasting hamburgers, fries, & drinks that provide value, extras such as play grounds, prizes, premiums, & games

• Emotional benefits:– KidsKidsKidsKids –––– fun via excitement of birthday parties, fun via excitement of birthday parties, fun via excitement of birthday parties, fun via excitement of birthday parties, relationship with Ronald McDonald & other relationship with Ronald McDonald & other relationship with Ronald McDonald & other relationship with Ronald McDonald & other characters, & feeling of special family times characters, & feeling of special family times characters, & feeling of special family times characters, & feeling of special family times – AdultsAdultsAdultsAdults –––– warmth via link to family events & warmth via link to family events & warmth via link to family events & warmth via link to family events & experiences reinforced by the McDonaldexperiences reinforced by the McDonaldexperiences reinforced by the McDonaldexperiences reinforced by the McDonald’’’’s s s s emotional advertisingemotional advertisingemotional advertisingemotional advertising

Perspectives of Brand IdentityPerspectives of Brand Identity

• As a product: product scope, product attributes, quality/value, uses, user, country of origin

• As an organization: organizational attributes, local vs. global

• As a person: brand personality, brand-customer relationships

• As a symbol: visual imagery/metaphors, heritage

• As a product: product scope, product attributes, quality/value, uses, user, country of origin

• As an organization: organizational attributes, local vs. global

• As a person: brand personality, brand-customer relationships

• As a symbol: visual imagery/metaphors, heritage

Core & Extended IdentityCore & Extended Identity

• Core identityCore identityCore identityCore identity: central timeless

essence of the brand – remains

constant as brand travels to

new markets/products

• Extended identityExtended identityExtended identityExtended identity: includes

various brand identity

elements, organised into

cohesive & meaningful groups

• Core identityCore identityCore identityCore identity: central timeless

essence of the brand – remains

constant as brand travels to

new markets/products

• Extended identityExtended identityExtended identityExtended identity: includes

various brand identity

elements, organised into

cohesive & meaningful groups

McDonald’s

Core Identity

McDonald’s

Core Identity

• Value offering: McDonald’s provides value as defined by the product, special offers, & buying experience given the price

• Food quality: consistently hot, good-tasting at any McDonald’s in the world

• Service: fast, accurate, friendly, & hassle free

• Cleanliness: operations are always spotless on both sides of the counter

• User: families & kids are a focus, but serves a wide clientele

• Value offering: McDonald’s provides value as defined by the product, special offers, & buying experience given the price

• Food quality: consistently hot, good-tasting at any McDonald’s in the world

• Service: fast, accurate, friendly, & hassle free

• Cleanliness: operations are always spotless on both sides of the counter

• User: families & kids are a focus, but serves a wide clientele

Four PerspectivesFour Perspectives

Brand as Brand as Brand as Brand as

Product organization person symbol

1.Product scope 7.Organization attributes 9.Personality 11.Visual

2.Product attributes 8.Local vs. global 10.Brand- imagery &

3.Quality/value customer metaphors

4.Uses relationships 12.Brand

5.Users heritage

6.Country of origin

Product logic (marketing mix) to

Brand logic (meaning and value)

Product

Brand

Brand Identity Prism - KapfererBrand Identity Prism - Kapferer

Brand Identity Prism - KapfererBrand Identity Prism - Kapferer

BRAND

A leading Durables Brand

BRAND

A leading Durables Brand

Personality Personality

• Young• Upwardly mobile• Smart

• Young• Upwardly mobile

• Smart

Culture Culture • Believes in

values & ethics• Indian with

an internationalmindset.

• Believes invalues & ethics

• Indian withan internationalmindset.

Consumer

self-

projection

Consumer

self-

projection • Keeps up with

the times• Omnipresent

• Keeps up withthe times

• Omnipresent

• Range of products• For the home

• Range of products• For the home Physique Physique

• Accessible• Brings ‘excitement’

to my life

• Accessible• Brings ‘excitement’

to my lifeRelationship Relationship

• My bet for the future

• Likeable

• My bet for the future

• LikeableConsumer

reflection

Consumer

reflection

• Positioning StatementPositioning StatementPositioning StatementPositioning StatementLG strives to enhance the customer’s life (and lifestyle) with intelligent features, intuitive functionality, and exceptional performance. Choosing LG is a form of self-expression and self-satisfaction. Our customer will take pride in owning the amazing and take comfort in knowing he/she made a smart, informed decision.

• Brand PlatformBrand PlatformBrand PlatformBrand PlatformThe LG brand comprises four basic elements: Values, Innovation, People, and Passion

• Positioning StatementPositioning StatementPositioning StatementPositioning StatementLG strives to enhance the customer’s life (and lifestyle) with intelligent features, intuitive functionality, and exceptional performance. Choosing LG is a form of self-expression and self-satisfaction. Our customer will take pride in owning the amazing and take comfort in knowing he/she made a smart, informed decision.

• Brand PlatformBrand PlatformBrand PlatformBrand PlatformThe LG brand comprises four basic elements: Values, Innovation, People, and Passion