48990396 Strategic Brand Management Keller 2 CBBE 0002

8/3/2019 48990396 Strategic Brand Management Keller 2 CBBE 0002

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Customer-Based Brand Equity



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Motivation forCustomer-Based Brand Equity Model

Marketers know strong brands are important but arent always sure how to build one.

CBBE model was designed to be comprehensive

cohesive

well-grounded

up-to-date

actionable



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Rationale of Customer-Based Brand Equity Model

Basic premise: Power of a brand resides in the mindsof customers

Challenge is to create the right brand knowledgestructures - ensure customers have the right types of experiences with products and services through theirmarketing programs: Thoughts

Feelings Images

Perceptions

Attitudes



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Building

Customer-Based Brand EquityThe CBBE model provides -

Branding ladder - building a strong brand involves aseries of steps

Building blocks - strong brand is characterized by alogically constructed building blocks

Reinforces a number of branding tenets

1. Customer¶s own brands

2. Don¶t take short cuts with brands3. Brands should have a duality ± rational and emotional

4. Brands should have richness - resonance

5. Brand resonance provides important focus



CBBC Model is Useful

CBBC model is useful as - ± Road map /guidance for brand building

± Yardstick to assess progress / weaknesses andstrengths

± Guide for marketing research effort



The Concept of CBBE

Customer-based brand equity can be Positive CBBE - gets a positive response from consumers

Negative CBBC - evokes a negative response

CBBE has 3 key ingredients

1. Differential effect on consumer response to themarketing of the brand (because of brand knowledge),(if there is no differential effect, it is a commodity and competition

will be based on price)

2. Because of Customer brand knowledge the result of marketing and previous experience with the brand

3. Which causes Customer response to brandmarketing reflected in the perception, preferencesand behavior related to all aspects of the marketing



Brand Equity as a Bridge

CBBE represents the added value endowedto a product as a result of past investments inthe marketing of a brand.

Hence CBBE provides direction and focus tofuture marketing activities It provides focus and guidance to interpret the past

marketing programs and design of future marketing

programs



Brand Equity as a Bridge

Customer knowledge provides a vital bridge fromthe past to the future

BE as a reflection of the past all past expenditure are

either good or bad brand investmentsQuality of investment is more important than quantity (can overspend if the money is not spent wisely)

BE as direction for the future Consumers decidewhere the brand can go and where it cannot because of brand knowledge created over time - dictates the futuredirection for the brand..

The true value and Future prospects of the brand rests with theconsumer



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Consumer-Based Brand Equity Framework

Brand

Knowledge

Brand

Recognition

Brand

Recall

Non-Product-Related

(e.g., Price, Packaging,

User and Usage Imagery)

Product-Related(e.g., color, size,

design features)

Functional

Symbolic

Experiential

Attributes

Benefits

Overall

Evaluation

(Attitude)

Types of

Brand Associations

Favorability,

Strength, and

Uniqueness of

Brand Association

Brand

Awareness

BrandImage



Sources of BE - Determinants of CBBE

Brand Knowledge - key to differential effect that creates /drives BE

The associative network memory model ± BK is considered a node in memory with a variety of associations

Brand associations are the other nodes that are linked to the brandnode in memory (about the product and aspects independent of it)

The associations are categorized as - Brand awareness and familiarity ± strength of the memory

The ability to identify the brand and recall it and«

To recall it under many different conditions Brand Image ± is consistent with an associative memory model ±

a perception about a brand as reflected by the band associations

Brand Associations vary by groups




CBBE occurs when consumer has a high levels of:

1. Awareness and familiarity with the brand

In some cases this alone may be adequate, but in othercases

2 . Strong, favorable, and unique brandassociations (brand Image) in memory

determines the differential response (meaningfuldifferences) which makes up BE.





1. Brand Awareness consists of -

Brand recognition ability to confirm prior exposure to theBrand, given the brand as a cue

Important when decisions are made in the store Brand Recall ability to retrieve the brand from memory

when given a brand association cue - the product category,the needs fulfilled, purchase situation

Important when brand is not present and it has to be

actively sought on-line brands, critical services etc Relative importance of recognition and recall depends on

whether - product related decision is taken with product present orabsent

It is easier to recognize than recall.





1. Brand awareness

Consequences important role in consumerdecision making for 3 reasons

1. Learning Advantage for formation of brandassociations

2 . Consideration advantage puts brand on theconsideration set

3. Choice advantage particularly with Lowinvolvement goods




Consequences of Brand awareness important rolein consumer decision making for 3 reasons

1. Learning Advantages influences the formation of brand

associations that make up the brand image.

The nature of the brand node affects the different kinds of associations to become attached in memory

It is the first step in building BE and the choice of brand

elements make the process easier or more difficult




Consequences of Brand awareness plays animportant role in consumer decision making

for 3 reasons

2 . Consideration Advantages thinking of the brand, whenmaking purchase decisions, when the brand is acceptable.

Raising awareness increases the likelihood of the brand

being on the consideration set. (Part-list-cuing says it reduces the likelihood of other brands not being there)




Consequences of Brand awareness important for3 reasons

3. Choice advantage affects choice in the consideration set

even when there are no other associations to those brands.(Consumers buy well established brands)

In low-involvement situations - Minimum levels of brandawareness may be adequate to produce choice even in theabsence of well formed attitudes

(In low-involvement situations consumers -1. Lack purchase motivation- does not care about the

product - gasoline

2. Lack purchase ability to judge product quality. Heuristics(shortcut) will be used and the brand which they are familiarwith will be chosen)




Establishing brand awareness

Repeated exposure through IMC

increases familiarity with the brand.

useful for brand recognition more than for brand recall

(Important to reinforce brand name with all brand elements)

For increased recall the brand requires linkages inmemory of

appropriate product category

other situational purchase or consumption cues

(using a slogan or jingle can creatively do this along with the other brandelements)





2. Brand Image created by

Marketing programs that link strong favorable

associations to the brand in memory

And other sources of information

Marketer controlled sources of info

Distribution channel, company, person, place or events

Info from other sources / WOM

Brand Experience

Assumptions and inferences from the brand





2.Brand Image

1. Strength of Brand Associations

Consumer beliefs about brand attributes are formed inmay ways -

Personal experience information creates the strongestbrand attributes and benefit association (important to decisionmaking)

WOM and other non-commercial sources ofinformation forms the next strongest associations

Company created sources of information createsweakest associations (advertising)





2. Brand Image is created by marketing programs that link strong favorable associations

1. Strength of Brand Associations depends on howmarketing programs affect brand experience

quantity and quality of processing (more deeply a personthinks about the information and relates it to existing brand

knowledge, stronger the associations)





2. Brand Image is created by marketing programs that link strong favorable associations

1. Two factors affect the strength of the associations1. Relevance of the information

2. Consistency with which the information is presented over time

Recall and salience of brand depends on particular associations

1. The context in which the brand is considered and

2. The retrieval cues that are present and serve as reminders




Brand Image

1. Strength of Brand Associations depends on howmarketing programs affect brand experience

Companies create strong brand associationsthrough a variety of means

Creative communication - brand relatedinformation is related to existing knowledge

Repeated exposure - over time and space, sothat retrieval cues are present as reminders

All marketing programs and brand activitieschosen must affect the strength of brandassociations




Brand Image

2. Favorability of Brand Associations associationsdesirable to the consumer, delivered effectively

D esirability depends on 3 factors

1. How relevant consumers find the brand associations

2. How distinctive they find the association

3. How believable they find the associations

D eliverability depends on 3 factors

1. Actual and potential ability of the product to perform2. Current or future prospects of communicating the performance

3. Sustainability of the actual or communicated performance over time.

Effectively delivered

Cost of delivery, and

Time necessary for to create / change desired associations?




Brand Image is created by marketing programs

1. Unique brand associations should not givereasons for customers not to buy the brandtherefore consider both -

Points of diff erenc e - meaningful points of difference the reason to buy - the associated USP

Points of parity be as good as the competition onother associations (to negate the potential points of difference of competitors)




Brand Image is created by marketing programs1. Unique brand associations - sustainable competitive

advantage USP brand positioning

1. USP - product related / non product related attributes

or benefits (user type, usage situations)Differences can be communicated

explicitly by direct comparison with competitors

Or implicitly highlighted without a competitive point of reference

2. Shared associations with competition helps establish

Category membership and scope of the competition

Shares the Product category attitude - specific beliefs and attitudestowards the category as a whole or a member of the category alsobecome brand associations




Brand Image is created by marketing programs

Unique brand associations valuation is -

situation and context dependent and

varies according to consumer goals

Not all associations are viewed as important, or

viewed by consumers (Color of Fed Ex)

Nor are they equally valued across all purchase orconsumption occasions (Christmas cards by Fed Ex)



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CUSTOMER-BASED BRAND EQUITY PYRAMID

RESONANCE

SALIENCE

JUDGMENTS FEELINGS

PERFORMANCE IMAGERY

4. RELATIONSHIPS =

What about you & me?

3. RESPONSE =

What about you?

2. MEANING =

What are you?

1. IDENTITY =

Who are you?



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Salience Dimensions

D epth of brand awareness

Ease of recognition and recall

Strength and clarity of category membership

Breadth of brand awareness with varied

Purchase consideration

Consumption consideration



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Performance Dimensions

Primary characteristics and supplementaryfeatures

Product reliability, durability, and serviceability

Service effectiveness, efficiency, and empathy

Style and design

Price



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Imagery Dimensions

User profiles

Demographic & psychographic characteristics

Actual or aspirational

Group perceptions - popularity

Purchase & usage situations Type of channel, specific stores, ease of purchase

Time (day, week, month, year, etc.), location, context of usage

Personality & values

Sincerity, excitement, competence, sophistication, ruggedness

History, heritage, & experiences

Nostalgia

Memories



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Judgment Dimensions

Brand quality

Value

Satisfaction

Brand credibility

Expertise

Trustworthiness

Likability

Brand consideration

Relevance

Brand superiority

Differentiation



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Feelings Dimensions

Warmth

Fun

Excitement Security

Social approval

Self-respect



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Resonance Dimensions

Behavioral loyalty

Frequency and amount of repeat purchases

Attitudinal attachment

Love brand (favorite possessions; a little pleasure)

Proud of brand

Sense of community

Kinship

Affiliation

Active engagement Seek information

Join club

Visit web site, chat rooms



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Customer-Based Brand Equity Model

Consumer-

Brand

Resonance

Brand Salience

Consumer

Judgments

Consumer

Feelings

Brand

PerformanceBrand

Imagery

INTENSE, ACTIVE

LOYALTY

RATIONAL &

EMOTIONAL

REACTIONS

POINTS-OF-

PARITY &

POINTS-OF-

DIFFERENCE

DEEP, BROAD

BRANDAWARENESS



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Sub-Dimensions of CBBE Pyramid

LOYALTY

ATTACHMENT

COMMUNITY

ENGAGEMENT

QUALITYCREDIBILITY

CONSIDERATION

SUPERIORITY

WARMTH

FUN

EXCITEMENT

SECURITY

SOCIAL APPROVAL

SELF-RESPECT

CATEGORY IDENTIFICATION

NEEDS SATISFIED

PRIMARY CHARACTERISTICS &

SECONDARY FEATURES

PRODUCT RELIABILITY,

DURABILITY & SERVICEABILITYSERVICE EFFECTIVENESS,

EFFICIENCY, & EMPATHY

STYLE AND DESIGN

PRICE

USER PROFILES

PURCHASE & USAGE

SITUATIONS

PERSONALITY &VALUES

HISTORY, HERITAGE,

& EXPERIENCES



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Application:

Identify the key drivers of brand equity

0.17 0.66

0.24

0.65Performance

Imagery Feelings

Judgment

Resonance

0.58

0.49



BuildingCustomer-Based Brand Equity

Brand knowledge structures depend on . . .

The initial choices for the brand elements

The supporting marketing program and the mannerby which the brand is integrated into it

Other associations indirectly transferred to the

brand by linking it to some other entities

48990396 Strategic Brand Management Keller 2 CBBE 0002

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