1. A Framework for Marketing Management
Chapter 8
Creating Brand Equity
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2. Copyright 2009, Prentice-Hall, Inc.
Chapter Questions
What is a brand, and how does branding work?
What is brand equity, and how is it built, measured, and managed?
What are the important decisions in developing a branding strategy?
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3. Copyright 2009, Prentice-Hall, Inc.
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.
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The Role of Brands
Identify the maker
Simplify decision making and reduce risk
Simplify product handling and tracing
Organize inventory and accounting
Offer legal protection
Signify quality
Create barriers to entry
Secure a competitive advantage
Secure price premium
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The Scope of Branding
Branding—endowing products and services with the power of a brand.
It’s all about creating differences between products.
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Brand Equity
Brand equity—the added value endowed on products and services, reflected in how customers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability the brand commands for the firm.
Customer-based brand equity—the differential effect that brand knowledge has on consumer response to that brand’s marketing.
Arises from customer response.
Differences in response are a result of brand knowledge.
Differential response is reflected in perceptions, preferences, and behaviors related to the brand’s marketing.
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7. Marketing Advantages of Strong Brands
Improved perceptions
Greater loyalty
Less vulnerable to competitors
Less vulnerable to crises
Larger margins
More inelastic responses to price increases
More elastic responses to price decreases
Greater trade cooperation
Increased marketing communication effectiveness
Possible licensing opportunities
Brand extension opportunities
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Brand Promise
The marketer’s vision of what the brand must be and do for consumers.
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Brand Equity Drivers
Brand elements
Marketing activities
Meaning transference
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10. Criteria for Choosing Brand Elements
Building the Brand
Memorable
Meaningful
Likeability
Defending the Brand
Transferable
Adaptable
Protectible
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11. Designing Holistic Marketing Activities
Personalization—ensuring that the brand and its marketing are as relevant as possible to as many customers as possible.
Integration—mixing and matching marketing activities to maximize their individual and collective efforts.
Internalization—ensuring employees and marketing partners understand basic branding notions and know how they can help (or hurt) brand equity.
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12. Leveraging Secondary Associations
Linking the brand to other information in memory that conveys meaning to consumers.
Sources:
Other brands
Places
Things
People
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13. Measuring Brand Equity
Brand audit
Brand tracking
Brand valuation
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Managing Brand Equity
Brand reinforcement
Brand revitalization
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15. Brand Strategy and Customer Equity
Develop new brand elements.
Apply existing brand elements.
Use a combination of old and new brand elements.
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16. Table 8.3: Branding New Products
Brand extension
Sub-brand
Parent brand
Family brand
Line extension
Category extension
Brand line
Brand mix
Branded variants
Licensed product
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Branding Decisions
Individual names
Blanket family names
Separate family names for all products
Corporate name, combined with individual product names
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Brand Extensions
Advantages
Improved odds of success
Positive consumer expectations
Retailer support
Leverage current brand awareness
Reduced cost of the launch campaign
Feedback benefits
Disadvantages
Brand dilution
Risk to brand integrity
Risk of harm to parent brand
Cannibalization
Lost opportunity to create a new brand
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19. Reasons for Multiple Brands in Portfolio
To increase shelf presence and retailer dependence
To attract consumers seeking variety
To increase internal competition
To yield economies of scale
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20. Brand Roles in a Brand Portfolio
Flankers—“fighter” brands.
Cash cows—“milk” these brands because they are profitable.
Low-end entry level—attract customers to the franchise.
High-end prestige—high-priced brand used to add prestige and credibility.
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21. Copyright 2009, Prentice-Hall, Inc.
Customer Equity
The sum of lifetime values of all customers.
Customer lifetime value is affected by revenue and cost considerations related to:
Acquisition
Retention
Add-on spending
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
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