© Dr V.Kumar V. Kumar PROFITABLE CUSTOMER ENGAGEMENT Concepts, Metrics & Strategies

Chapter 3 Brand: “Is that what you think of me?” Chapter 3 Brand: “Is that what you think of me?” Instructor’s Presentation Slides 2

© Dr V.Kumar Introduction Connecting brand with customers  Understanding customer needs is one way to connect the brand with the customers  Companies need to focus on customer needs and have to move up/down the value chain to stay connected with customers 3

© Dr V.Kumar Defining Customer Brand Value  Customer Brand Value is the net effect of a customer’s brand knowledge, brand attitude, brand purchase intention, and brand behavior formed due to prior brand experience and the marketing of a brand 4

© Dr V.Kumar Measuring Customer Brand Value  Each customer’s perception of the brand is different and cannot be generalized and looked at as a collective measure  It is crucial to understand how a customer’s behavior and attitude changes based on the brand value perceptions  Individual customer perception of the brand needs to be evaluated for profitability 5

© Dr V.Kumar The CBV Framework 6 Customer Experience Brand Awareness Brand Image Brand Trust Brand Affect Purchase Intention Brand Loyalty Brand Advocacy Premium Price Brand Knowledge Brand Attitude Brand Behavior Intention Components of Customer Brand Value Positive Word of Mouth Marketing Cost Purchase Frequency Contribution Margin Predicted Behavior Outcomes Customer-Level Firm Actions Marketing Communications Firm-Level Firm Actions Marketing Communications Corporate Activities Marketing Mix Activities Brand Behavior Customer Satisfaction Customer Lifetime Value Source: V. Kumar, A.M. Luo, and V.R. Rao, Connecting brands with customers: An integrated framework. Working Paper (as of 2013), Georgia State University.

© Dr V.Kumar Components of the CBV Framework 7  Brand Knowledge  Brand Attitude  Brand Behavior Intention  Brand Behavior

© Dr V.Kumar Brand Knowledge  Brand Knowledge – Customer knowledge of a brand which affects the overall awareness and image towards a brand.  Components of Brand knowledge are  Brand awareness – The extent to which the customer is aware of the brand.  Brand Image – How a firm markets its brand and all other brand-related activities undertaken by the firm which influence the customer’s perceptions of a brand. 8

© Dr V.Kumar Brand Attitude  Brand Attitude – The attitude each customer forms about the brand.  Components of Brand attitude are  Brand trust – Refers to a customer’s willingness to trust the brand to satisfy his/her needs.  Brand affect– A customer’s positive emotional response towards a brand. 9

© Dr V.Kumar Brand Behavior Intention  Brand Behavior Intention –Reflects the actual effect of the marketing actions and brand perception on the brand behavior of the customers.  Components of Brand Behavior Intention are  Purchase Intention – A customer’s perception of a brand reflected by his/her intention to purchase. 10

© Dr V.Kumar Brand Behavior  Components of Brand Behavior are  Brand loyalty – A loyal customer is one who makes repeated purchases of a preferred brand and shows both attitudinal and behavioral loyalty to the brand, and who does not respond to the constant fluctuations in the market.  Brand advocacy - Representing the extent to which a customer is willing to refer the brand to their friends and relatives.  Brand Price Premium Behavior - A customer’s willingness to pay a premium price to buy a preferred brand over other products. 11

© Dr V.Kumar Predicted Behavior Outcomes  Customers with greater brand value engage in activities that result in higher customer value 12 Greater a customer’s brand value, greater his / her lifetime value Customer Lifetime Value (CLV) Greater satisfaction and awareness of brand enables customers to recommend the brand to others Positive word of mouth By targeting highly aware customers with marketing communications, marketing cost can be reduced Marketing cost Purchase frequency increases when customer is highly engaged with the brand Purchase frequency Greater the brand value of customer greater the contribution margin Contribution Margin

© Dr V.Kumar Measuring CBV  Customers are surveyed to capture:  Brand Awareness, Brand Image, Brand Trust, Brand Affect, Brand Purchase Intention, Brand Loyalty, Premium Price Behavior and Brand Advocacy  CBV score for a customer is calculated based on summing up the averages of individual brand components 13

© Dr V.Kumar Maximizing CBV  Customer Brand Value can be maximized by linking CBV score to customer’s CLV score  Segment customers based on their CLV scores and thereafter linked to the segment wise CBV scores 14

© Dr V.Kumar Conclusion  Customer Brand Value  Foundation of the CEV framework  Perception of the brand in the mind of a customer  The CBV framework and the predicted outcomes of the framework 15

© Dr V.Kumar End of Chapter 3 16