BRAND MANAGEMENT AND NEW PRODUCT DEVELOPMENT SECTION 4B Brand Management and the Firm Brand Equity Models ALAN L. WHITEBREAD

This type of activity is usually the responsibility of the SBU not the corporate office. [A] centralized research [B] corporate business development [C] large advanced R&D projects [D] strategic alliances The goods-services continuum includes all except which of the following quality attributes? [A] credence [B] experience [C] search [D] value The augmented product ring of the product concept includes? (A) features, packaging and styling (B) the core product or service (C) installation delivery and repair (D) A, B and C.

SEVEN BRAND MANAGEMENT APPROACHES Economic Identity Consumer-based Personality Relational Community Cultural

COMPANY SENDER FOCUS THE ECONOMIC APPROACH Firm owns the brand Manages the brand with the traditional marketing mix Company identity helps shape a brand message Marketer is in charge of brand value creation Linear [broadcast] communication from marketer down to and through channels of distribution [push] to receivers A consumer is an “economic man” passively receiving and understanding messages from the sender exactly as intended.

COMPANY SENDER FOCUS Economic approach – The economic man Human behavior is rational Humans maximize their satisfaction and/or utility [self-interest is important] Humans have perfect market information The exchange is an isolated event and not related to any other event Humans have limited income which causes them to maximize the utility of their income

COMPANY SENDER FOCUS THE IDENTITY APPROACH Focus is on corporate identity Brand is integrated into all organizational levels Organizational culture and corporate identity heavily influence the brand

HUMAN RECEIVER FOCUS THE CONSUMER-BASED APPROACH [CBBE] Brand is linked to customer associations The brand is a consumer mental construct Focus shifts to the message receiver The consumer is the owner of the brand Marketer can program the consumer through brand messages

CUSTOMER-BASED BRAND EQUITY [CBBE] PYRAMID RESONANCE SALIENCE Projecting the brand JUDGMENTS FEELINGS PERFORMANCE IMAGERY 4. RELATIONSHIPS 3. RESPONSE 2. MEANING 1. IDENTITY

CBBE: BRAND IDENTITY Who are you? RESONANCE SALIENCE Projecting the brand JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand salience How often is the brand recalled? Is it easy to recall? What reminders are necessary? Dimensions of brand awareness Depth: the likelihood of recall Breadth: the range of purchase opportunities Beverage category hierarchy How effective are the brand elements? Identify and differentiate each one

CBBE: BRAND MEANING What are you? RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand performance Primary product and supplementary features Product reliability, durability, and serviceability Service effectiveness, efficiency, and empathy Style and design Value proposition using emotional and intangible elements [not price]

CBBE: BRAND MEANING What are you? [continued] RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand imagery User profiles Demographics, psychographics, … Purchase and usage situations Channel, store, timing, … Personality and values Sincerity, excitement, competence, … History, heritage, and memorable experiences

CBBE: BRAND RESPONSE What about you? RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand judgments Brand quality Value, satisfaction, … Brand credibility Expertise, trustworthiness, likeability, … Brand consideration As a relevant solution, … “The best solution for my situation.” Brand superiority Differentiation, associations, …

CBBE: BRAND RESPONSE What about you? [continued] RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand feelings Warmth Fun or excitement Security Social approval Self-respect

CBBE: BRAND RELATIONSHIPS What about you and me? RESONANCE SALIENCE JUDGMENTS FEELINGS PERFORMANCE IMAGERY Brand resonance Behavioral loyalty Frequency of repeat purchases Attitude attachment Strong affection, pride of ownership, … Sense of community affiliation Active engagement Regularly involved with some aspect

CUSTOMER-BASED BRAND EQUITY PYRAMID Rational and emotional reactions 4. RELATIONSHIPS = Intense, active, loyal RESONANCE What about you & me? 3. RESPONSE = Rational and emotional reactions JUDGMENTS What about you? FEELINGS 2. MEANING = POD and POP PERFORMANCE What are you? IMAGERY 1. IDENTITY = Broad awareness SALIENCE Who are you?

HUMAN RECEIVER FOCUS THE PERSONALITY APPROACH Humans endow the brand with a human character / personality, thus giving it symbolism A prerequisite for the relational approach Models David Aaker’s Brand Equity Model – Major points Brand Personality [more in Section 7] and Corporate Brand Personality

DAVID AAKER’S BRAND EQUITY MODEL Brand equity is composed of distinct categories of brand assets and liabilities. Brand loyalty Brand awareness Perceived quality Brand associations Other proprietary brand assets

DAVID AAKER’S BRAND EQUITY MODEL BRAND LOYALTY Reduced [marginal] marketing expenses Provides trade leverage [with resellers] The ability to attract new customers and keep existing ones Provides time to respond to competitive threats

DAVID AAKER’S BRAND EQUITY MODEL BRAND AWARENESS It is an anchor to which you can attach other associations It is familiar It is an indicator of commitment to the brand It indicates the brand should be considered if not already a customer

DAVID AAKER’S BRAND EQUITY MODEL PERCEIVED QUALITY Provides a reason to buy Differentiates the brand and its products Part of the positioning Provides value Increases the interest of channel members Provides the opportunity for extensions

DAVID AAKER’S BRAND EQUITY MODEL BRAND ASSOCIATIONS Help with information retrieval Differentiate the brand and its products Part of the positioning Provide a reason or reasons to buy Create positive attitude or feelings Provide the opportunity for brand extensions

DAVID AAKER’S BRAND EQUITY MODEL BUILDING A BRAND Have a strong core brand identity that can be modified for different segments and products. Have a strong value proposition using emotional and intangible appeals. Establish strong brand positioning that links to the brand identity. Great execution NPD, launch, product / family life cycle

DAVID AAKER’S BRAND EQUITY MODEL BUILDING A BRAND Be consistent over time Use the brand leverage that has been developed only participate in strong co-branding programs Measure and track various brand equity elements over time Have a strong brand manager Invest in the brand

PRODUCT BRAND PERSONALITY Defined in user imagery Understand the characteristics of customers Utilize human traits that can be attributed to a brand Customers can express their actual or desired self-image by association with the product

CORPORATE BRAND PERSONALITY Defined in the actions, values, and words of all its employees Supersedes any product brand personality Core dimensions [traits] Heart [passionate and compassionate] Mind [creative and disciplined] Body [agile and collaborative]

ATTENTION-GETTING vs. MEMORABLE BILLBOARD http://www.billboard.com/articles/events/super-bowl-2015/6458193/super-bowl-2015-best-worst-commercials PEOPLE http://www.people.com/article/super-bowl-2015-trending-commercials-list

Average number of U.S. households [115,700,000] watching Super Bowl 49 was 49.7% Cost of one 30-second commercial was ? Per household that is approximately 3.9 cents. Per person that is approximately 2.8 cents.