Creating Brand Equity

Brand 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.

The Role of Brands Identify the maker Simplify product handling or tracing Organize accounting and inventory records Offer legal protection for unique features or aspects of product

The Role of Brands Signify quality Create barriers to entry Serve as a competitive advantage Secure price premium

Branding Endowing products and services with the power of a brand.

Brand Equity The differential effect that brand knowledge has on consumer response to the marketing of that brand.

Brand Knowledge Thoughts Feelings Knowledge Images Beliefs Experiences

Marketing Advantages of Strong Brands Improved perceptions of product performance Greater loyalty Less vulnerable to competition Less vulnerable to crises Larger margins Inelastic consumer response to price increases Elastic consumer response to price decreases Greater trade cooperation Increase in effectiveness of IMC Licensing opportunities Brand extension opportunities

Branding a Place

Brand Promise The marketer’s vision of what the brand must be and do for Consumers. Click on the video icon to view a clip about Starbucks’ brand.

The Virgin Brand

Brand Equity Models Brand Asset Valuator Aaker Model BRANDZ Brand Resonance

Brand Asset Valuator (BAV) Brand Equity Differentiation Knowledge Relevance Esteem

Aaker Model – Brand Identity Brand-as-organization (Organizational Attributes, local vs. global) Brand-as-product (Scope, attributes, quality/value, uses, users, Country of origin) Brand-as-person (Brand Personality, customer relationships) Brand-as-symbol (visual imagery/metaphors, Brand heritage)

Aaker Model – Brand Assets loyalty Brand associations Brand awareness Proprietary Assets (patents, trademarks, channel relationships) Perceived quality

The BRANDZ Model (sequential steps) Bonding (best) Advantage (better) Performance (deliver) Relevance (value) Presence (awareness)

Brand Resonance Pyramid (sequential series of steps)

Drivers of Brand Equity Brand Elements Marketing Activities Meaning Transference

Brand Elements Brand names URLs Slogans Elements Logos Characters Symbols

Brand Elements

Brand Element Choice Criteria Memorable recall Meaningful credible Likeability appealing Transferable other products or locations Adaptable updatable is brand elements Protectible legally

The cupped hands are an element of Allstate’s brand

Slogans Like a good neighbor, State Farm is there Just do it Nothing runs like a Deere Help is just around the corner Save 15% or more in 15 minutes or less We try harder We’ll pick you up Nextel – Done Zoom Zoom I’m lovin’ it Innovation at work This Bud’s for you Always low prices

Designing Holistic Marketing Activities Personalization (Internet, experiential, one-to-one, permission) Integration (mixing/matching marketing activities to maximize individual/collective effects) Internalization (activities/processes to inform/inspire employees)

Measuring Brand Equity Brand Audits (health of brand) Brand Tracking (over time) Brand Valuation (financial worth)

The 10 Most Valuable Brands 2004 Brand Value (Billions) Coca-Cola $67.39 Microsoft $61.37 IBM $53.79 GE $44.11 Intel $33.50 Disney $27.11 McDonald’s $25.00 Nokia $24.04 Toyota $22.67 Marlboro $22.13

Brand Reinforcement (consistently convey the meaning of the brand) Managing Brand Equity Brand Reinforcement (consistently convey the meaning of the brand) Brand Revitalization Brand Crises

Devising a Branding Strategy Develop new brand elements Apply existing brand elements Use a combination of old and new

Brand Naming Individual names Blanket family names (not tied to company reputation) Blanket family names (create brand-name recognition) Separate family names (very different products) Corporate name-individual name combo (sub-branding—Kellogg’s Rice Krispies, Raisin Bran, Corn Flakes)

Brand Roles in a Brand Portfolio Flankers (attack competitor brands so flagship brands retain desired positioning) Cash Cows (milk reservoir of existing brand equity) Low-end Entry-level (attract customers) High-end Prestige (adds value & credibility to entire portfolio)

Branding A Service Organization A strong service brand is essentially a promise of future satisfaction Blend (customer’s point of view) of what the organization: states it is, what others say, and how the organization performs the service Principal components of a service brand Presented Brand—controlled communications Brand Awareness—ability to recognize & recall brand External Brand—uncontrolled communications Brand Meaning—dominant perceptions of brand Brand Equity--differential effect that brand knowledge has on consumer response to the marketing of that brand.

A Service-Branding Model Presented Brand Brand Awareness External Brand Communications Brand Equity Customer Experiences with Company Brand Meaning

Cultivating Brand Equity Internalize the Brand Dare to be Different Brand Equity Determine your own Fame Emotional Connection

Dare to be Different The strongest brands reveal a conscious effort to be different Branding strategy goal is to reinforce a demonstrably different service experience with a demonstrably different brand presentation Starbucks could squeeze more tables and chairs into their stores, but doing so would undermine what they are really selling: a respite and a social experience Because of its two-by-two configuration of leather seats (instead of the more common three-by-three seating), Midwest Express Airline’s all coach service seems like first class. Enterprise Rent-A-Car customer-contact employees dress for differentiation. Men wear suits and women dresses or shirts and hose.

Determine Your Own Fame Service companies strengthen brand equity by focusing on underserved marketing needs. Service companies with strong brand equity provide a service that customers truly value; perform it better than competitors; and effectively tell their story through communications that create awareness, stimulate trial, and reinforce customers’ experiences Charles Schwab Corporation gave investors who knew what stocks they wanted to buy or sell the opportunity to do so without paying full commissions for advice they did not use. In Zagat’s (1997) survey of 60 of the world’s largest airlines on comfort, service, timeliness, and food, Midwest Express ranked 1st in the United States and was the only U.S. airline to place in the world’s Top 10

Make An Emotional Connection Great Brands reach beyond the purely rational and purely economic level to spark feelings of closeness, affection, and trust. Consumers live in an emotional world; their emotions influence their decisions. Great Brands transcend specific product features and benefits and penetrate people’s emotions. Charlotte Beers (1998), chairman of J. Walter Thompson, stated “The truth is, what makes a brand powerful is the emotional involvement of customers” The Globetrotters is a magical brand—a brand that evokes images of fun and laugher, respect and decency, hard work, and good values. Midwest Express could portray chocolate chip cookies in its advertising, but far more powerful is actually baking them onboard for passengers and serving them with a warm smile

Internalize the Brand Internalizing the brand involves explaining and selling the brand to employees. Most of all, internalizing the brand involves involving employees in the care and nurturing of the brand Enterprise Rent-A-Car “We’ll pick you up” Midwest Express noted that its employees are the most important audience for its marketing efforts.