Customer-based Brand Equity

and Brand Positioning

MKT 465: Ch 2

Ch

Heads 1. Customer-based

Brand Equity (CBBE)

2. Sources of Brand Equity

3. Brand Positioning 4. Establishing

Positioning 5. Positioning

Guidelines 6. Brand Mantra

1. Customer-based Brand Equity (CBBE)

3 constructs of Brand EquityCreating the Brand Differential Effect : Generic (price based competition) vs Brand (Value based competition) Creating Brand Knowledge Ensuring Positive Response: reflected on Perception, Preferences and on behavior: choice, reactions and evaluation)Hitachi vs GE TV

• Satisfying the NWDs of the Target Market

• Power of a brand lies in what customers have Learned, Felt, Seen. Heard and have Experienced

• CBBE is The differential effect that Brand knowledge has on Customer Response – Positive Equity:

favorable Response (P’s)

– Negative Equity: unfavorable Response (P’s)

1. Customer-based Brand Equity (CBBE)

Advantages of Strong Brands

• Better Perceptions • Greater Loyalty • Larger Margins• Less vulnerability to

Competitive Marketing Actions and Market Threats

• Inelastic response to price increase and Elastic response to price decrease

• Brand Extension and Expansion opportunities

• Greater Trade/ Gvt Support

Investment should

be focused on

quality building

but the quantity

of investment

2. Sources of Brand Equity (CBBE)

CBBE occurs when

A. the consumer has a high

level of awareness

and familiarity with

the brand and

B. holds some strong,

favorable and unique

brand associations in

memory These are also known as the

components of Brand

Knowledge

2. Sources of Brand Equity (CBBE)

A. Awareness: Brand Recognition and Recall: low involvement product

• Recognition: familiarity upon exposure (plays an important role at Point of Purchase decision making )

• Recall: Retrieve from memory : product category wise (plays an important role if the decisions are made away from Point of Purchase)

2. Sources of Brand Equity (CBBE)

Advantages of awareness :

Learning: the first step of building equity is to register

the brand in the minds of consumers

Consideration : raising awareness increases the

likelihood that the brand will be the member of the

evoke set

Choice: high level of awareness leads to fav decision

making ( especially for the low involvement products:

lack of purchase motivation: low differentiation or low

ability to judge ) Establishing Brand Awareness: Repeated Exposer: of brand elements through IMC

Experiences: Marketing MixComparison and Parity

B. Brand Image: strong, favorable n

unique Association with Brand

Personalities: attribute

(USP)/benefit/value/personality based

nodes. Generates beliefs

Strength of Association depends on

personal relevance, experiences ( WOM+

company controlled sources of info)

Brand Associations may be situation or

context dependent and vary according to

what customer what to achieve in that

purchase decision.

2. Sources of Brand Equity (CBBE)

• The Harley Davidson: rugged, macho, freedom-seeking. • Nike: High ambition, young, will for victory, performance, attitude, excitement.• Adidas: hardworking, muscularity, down to earth, confidence• Thumbs up : bravery / daring• Liril : freshness & Lime• Lux : Beauty, softness• Dove : Softness• Bisleri : Safety• Bajaj Pulsar : Power • Yamaha : Power • Titan : Style, elegance• Cinthol : Freshness• Pepsi: fun, sporty, music, high energy• Coke: emotional bonding, happiness, to inspire moments of optimism and uplift• BMW: performance, experience sophisticated, stylish, dominant, sporty &

aggressive • Benz: elegant, prestigious , excellence, luxury, traditional. • Audi: progressive, creative, socially inspirational, innovative• Blackberry: professional, classy, independent • Nokia: amateur, fun, colors, relations• Vodafone: faithful, always following.

2. Sources of Brand Equity (CBBE)

2 factors of the strength of Brand

association

The more deeply a person thinks about product

information and relates it to existing brand knowledge,

the stronger the resulting brand associations will be.

a. Personal Relevance

b. Consistency

Favorability of Brand Association : • By convincing consumers that the brand possesses relevant attributes and benefits that satisfy their NWDs • All Brand Associations are not equally imp to the cus.• Association is context/situation dependent.

Uniqueness of Brand Association• BA is based on USP

either by PODs/POPs or directly

• POP is done for category association

3. Brand Positioning

Brand Positioning Positioning is designing company’s offerings and image in such a way that is occupies a distinctive place in the minds of the target customers.

You must establish a mission for the brand and a vision of what the brand must be and do!

3 levels of Positioning: A. Positioning by Product Attributes: Pampers,

Colgate, Comtrex, Ritz Carlton Hotel (luxury), Motel 6 (economy) etc

B. Positioning by Product Benefits: Fair and Lovely, Nike (performance), Volvo (safety)

C. Positioning by creating Values and Beliefs: Starbucks, Cadbury, Coke, GP.

4. Establishing Brand PositioningDeciding on Positioning require determining Three dimensions I. Market Segments II. Competitors and Nature of Competition III. Points of Parity (POPs) and Points of Difference (PODs)

III. Points of Parity (POPs) and Points of Difference (PODs)• Category• Competitive• Co-relational PODs : USP based and requires ‘proof points/ reasons to believe (RTB)

II. Competitors and Nature of Competition

Frame of References should both market and industry competitors

I. Market Segments

Behavioral Segments are

often most valuable in

understanding branding

issues as they have

clearer strategic

implications

4. Establishing Brand PositioningI. Market Segments The more finely segmented the market, the more likely that the firm will be able to implement marketing progs that meet the NWDs of cus.Different segment might have different perception and pref for the brand. Demo: Ponds, L'Oreal facewash, GPBehavioral: L'Oreal, Sunsilk Shampoo

II. Nature of Competition

• Direct vs indirect• Multiple frames of refShampoo with Hair OilStarbucks : DD, Nescafe, Local Café III. POPs/PODsPODs: unique value: IKEA, SONY, British AirwaysPOPs: Category: basic VP s for Café POPs: Competitive : BE at some VP+ some unique VP

POPs: Correlational: low price vs high qualityTaste vs low CalVaried vs simple

5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions

I. Defining and Communicating the Competitive Frame of Ref

Establishing Category Membership by • Communicating Category Benefits: (POPs

and PODs based): better be convincing • Exemplars: ( new/ controversial brands) • Product Descriptor: brand elements should

be selected accordingly

For a established product but at introductory stage ,CM is not the focal

5. Brand Positioning Guidelines Developing Positioning I. Defining and

Communicating the Competitive Frame of Ref:

II. Choosing PODs

III. Establishing PODs and POPs

IV. Straddle Positions

II. Choosing PODs

3 considerations decide

attributes to serve the PODs

• Desirability ( attributes that

customer desires: important n

relevant to them)

• Deliverable ( companies

capabilities to serve VPs and

efficiency to convenience the

customers )

• Differentiating ( relative to

competition n sustainable

differences must matter to

consumers)

5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:

II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions

III. Establishing PODs and POPs

• Separate the PODs and POPs through separate and strong IMC campaigns

• Leverage the Equity of another Entity : ingredient based/ celebrity and experts endorsements

• Redefine the Relationship

5. Brand Positioning Guidelines Developing Positioning I. Defining and Communicating the Competitive Frame of Ref:II. Choosing PODsIII. Establishing PODs and POPs IV. Straddle Positions

IV. Straddle Positions

Simultaneous POP n POD but

with different competitions.

Cadillac: Lacking performance

Corvette: lacking elegance

6. Brand Mantra: Communicate, Simplify and Inspire

Brand Mantra is a short, three to five word phrases that captures the irrefutable essence or spirit of brand positioning. Also Known as Brand Essence or Core Brand Promise/ Personality

It works as a guidelines to the external and internal people of the company

Better be consistent

Three Constructs of Brand Mantra

Brand Functions: nature of the brand attributes/benefits/ experiences the Brand provides. Disney: Entertainment Descriptive Modifier: further clarifies its nature . Disney: FamilyEmotional Modifier: how exactly the brand provides benefits : Disney: fun