Lecturer – Md Shahedur Rahman Chapter 2 Part 2 Customer Based Brand Equity

2.2

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

Salience Dimensions 2.4 Depth of brand awareness Ease of recognition and recall Breadth of brand awareness Purchase consideration Consumption consideration

Depth and Breadth Importance 2.5 The product category hierarchy shows us not only the depth of awareness matters but also the breadth ( Width o Size). The brand must not only be top-of-mind and have sufficient “mind share,” but it must also do so at the right times and places.

Product Category Structure 2.6 To fully understand brand recall, we need to appreciate product category structure, or how product categories are organized in memory.

BeveragesWaterFlavoredAlcoholicWineBeer Distilled Spirits Non- Alcoholic Milk Hot Beverages Juices Soft Drinks

Performance Dimensions 2.9 Describes how well the product or service meet customer’s functional needs

Performance Dimensions 2.10 Five important types of Benefits and Attributes often underlie brand performance 1. Primary characteristics and supplementary features 2. Product reliability(consistency of performance overtime), durability (Economic life of the product), and serviceability ( After Sales Service)

Performance Dimensions Service effectiveness ( How well it satisfies the customer?), efficiency (Speed of Service), and empathy ( Provider seen as trusting and caring) 4. Style and design 5. Price

Imagery Dimensions User profiles Demographic and psychographic characteristics Actual or aspirational Group perceptions — popularity 2. Purchase and usage situations Type of channel, specific stores, ease of purchase Time (day, week, month, year, etc.), location, and context of usage

Imagery Dimensions Personality and values Sincerity, excitement, competence, sophistication, and ruggedness 5. History, heritage, and experiences Nostalgia Memories

Judgment Dimensions 2.14 Brand quality Value (Perceived Quality ) Satisfaction Brand credibility Expertise ( Competant, innovative and a market leader) Trustworthiness ( dependable and keeping customers interests in mind ) Likeability ( Fun, interesting and worth spending time with ) Brand consideration Relevance (Considering for possible purchase or not ) Brand superiority Differentiation ( Consumers consider better than others or not )

Judgment Dimensions 2.15 Brand judgments are customers’ personal opinions about and evaluations of the brand, which consumers form by putting together all the difference brand performance and imagery association

Feelings Dimensions 2.16 Warmth  Consumers may feel sentimental warmhearted or affectionate Eg. Titan Fun Joyous, playful, cheerful Eg. Disney land Excitement Energized, being cool or being alive Mountain Dew or MTV Security Safety, Comfort and Self assurance Insurance Social Approval Look favorably on their appearance Mercedes Self-respect Sense of Pride, accomplishment or fulfillment Tide Detergent laundry – doing the right thing for the family

Resonance Dimensions 2.17 Behavioral loyalty Attitudinal attachment Sense of community Active engagement

Resonance Dimensions 2.18 Behavioral loyalty Frequency and amount of repeat purchases Attitudinal attachment Positive attitude Love brand (favorite possessions; “a little pleasure”) Proud of brand Sense of community Kinship ( people associated with the brand ) Affiliation Active engagement Seek information Join club Visit website, chat rooms

Customer-Based Brand Equity Model Consumer- Brand Resonance Brand Salience Consumer Judgments Consumer Feelings Brand Performance Brand Imagery INTENSE, ACTIVE LOYALTY RATIONAL & EMOTIONAL REACTIONS POINTS-OF- PARITY & POINTS-OF- DIFFERENCE DEEP, BROAD BRAND AWARENESS

Brand Building Implications Customers own brands – The power of brands and its ultimate value to firm reside with customers. Don’t take shortcuts with brands – otherwise the foundation of the brand will be weak. Brands should have a duality – a functional and an emotional route. Example: Close up. Brand resonance provides important focus – marketers building brands should use brand resonance as a goal and as a means to interpret their brand related marketing activities. 20

customer equity case: Cadillac CTS 21 Cadillac is all about American Luxury. It had a market share of more than 50% in the luxury car market. Cadillac customer were getting old:60+ Lifetime value is decreasing. Customer equity was decreasing. BMW gained market share and Customer equity while targeting younger consumers. So Cadillac launched the CTS.

Is a company consumer-centric? Is the company looking for ways to take care of you? 2. Does the company know its customers well enough to differentiate between them? 3. Is someone accountable for customers? 4. Is the company managed for shareholder value? 5. Is the company testing new customer offers and learning from the results? Sources: Larry Selden and Geoffrey Colvin, 2004.

Customer Relationship Management (CRM) 2.23 Uses a company’s data systems and applications to track consumer activity and manage customer interactions with the company

Building customer equity Not only to create profitable customers, but to OWN them for life, earn a greater share of their purchases (share of customer), and capture their customer lifetime value. The ultimate aim of CRM is to produce high customer equity. Customer equity is the total combined customer lifetime values of all of the company’s customers. Sales and market share relates to the past. Customer equity related to the past and the future. 24

Building the right brand relationships with the right customer Building the right relationships with the right customers involves treating customers as assets that need to be managed and maximized. Different types of customers require different relationship management strategies. 25

Relationship of Customer Equity to Brand Equity 2.26 Customers drive the success of brands but brands are the necessary touchpoint that firms have to connect with their customers. Customer-based brand equity maintains that brands create value by eliciting differential customer response to marketing activities. The higher price premiums and increased levels of loyalty engendered by brands generate incremental cash flows.