Strategic Brand Management: Chapter 2

Strategic Brand Management: Chapter 2

• Customer-Based Brand Equity (CBBE): Focuses on consumer perspective, emphasizing brand's power residing in consumer minds and hearts. Evaluates the different effect brand knowledge has on the customer's reaction to the brand.

Learning Objectives

• Define customer-based brand equity.
• Explain the sources and outcomes of customer-based brand equity.
• Identify the four components of brand positioning.
• Describe guidelines for developing a strong brand positioning.
• Explain brand mantras and their development.

Customer-Based Brand Equity

• Defining CBBE: Approaches brand equity from the consumer's viewpoint, highlighting the impact of brand knowledge on consumer response.
• Brand Equity as a Bridge: Brand knowledge acts as a strategic link connecting past and future brand strategies, guiding appropriate and inappropriate future directions.

Making a Brand Strong: Brand Knowledge (1 of 3)

• Brand Knowledge: Crucial for creating brand equity, driving differential effects and shaping consumer memory.
• Associative Network Memory Model: Views memory as a network of interconnected nodes (concepts/information) and links (strength of association).

Making a Brand Strong: Brand Knowledge (2 of 3)

• Associative Network Memory Model (cont.): Nodes represent stored information, and links illustrate the strength of associations between nodes.
• Brand Associations: Informational nodes connected to the brand node in memory.

Making a Brand Strong: Brand Knowledge (3 of 3)

• Brand Knowledge Components:
  • Brand Awareness: Consists of recognition and recall; plays a crucial role in building brand equity.
  • Brand Image: Reflects consumers' perceptions of a brand, based on the associated information in memory.

Figure 2-2: Possible Associations with the Apple Brand Name

• Possible associations shown visually connecting the Apple brand name with concepts such as user-friendly, innovative, expensive, etc.

Sources of Brand Equity

• Brand Awareness: A key component of brand equity.
• Brand Image: Consumers' perceptions of a brand.

Brand Awareness (1 of 3)

• Brand awareness: Consists of brand recognition and recall.
• Brand Recognition: Consumers' ability to confirm prior exposure to the brand when shown the brand name or logo.

Brand Awareness (2 of 3)

• Brand Recall: Consumers' ability to retrieve a brand from memory when given cues about the product, category, needs fulfilled, or the use case.
• Benefits: Learning, consideration, and choice advantages; improved consumer purchase motivation, ability, and opportunity.

Brand Awareness (3 of 3)

• Brand Experiences: Actions impacting brand recognition and awareness; including name, logo, advertising, and other marketing efforts.
• Repetition: Enhances brand recognizability but needs connections in memory to improve brand recall.

Brand Image (1 of 2)

• Brand awareness: Prerequisites for emphasis on brand image creation.
• Brand Image Creation: Designing marketing programs that create strong, favorable, and unique associations in consumer memory.
• Brand associations: Represent either brand attributes or benefits.

Brand Image (2 of 2)

• Strength of Brand Associations: More in-depth consumer thought and connecting existing knowledge with product attributes enhances brand associations.
• Favorability of Brand Associations: Higher when associating desired attributes and benefits with a brand.
• Uniqueness of Brand Associations: A unique selling proposition providing competitive advantage.

Identifying and Establishing Brand Positioning

• Concepts: Target market, nature of competition, points-of-parity, and points-of-difference.

Basic Concepts

• Brand Positioning: Designing a company's offering and image to secure a distinct and valued position in the target market.
• Consumer Perspective: Finding the appropriate place in consumers' minds.
• Market perspective: Suitable "location" in customers’ or market segment minds to improve perception.

Target Market

• Market Segmentation: Dividing the market into homogenous segments based on similar needs and behaviors.
• Criteria: Identifiability, size, accessibility, and responsiveness.

Figure 2-3: Consumer Segmentation Bases

• Segments are categorized and shown: Behavioral, Psychographic, and Geographic.

Figure 2-4: Business-to-Business Segmentation Bases

• Segmentation bases presented for B2B market considerations; factors such as goods, buying conditions, and demographics are listed.

Figure 2-5: Hypothetical Examples of Funnel Stages and Transitions

• Illustrates metrics of consumer engagement at different stages of the product funnel (Awareness, Ever Tried, Recent Trial, Occasional User, etc.).

Nature of Competition

• Competitive Analysis: Evaluation of factors like resources, capabilities, and intentions of competitors.
• Market Selection: Competitive analysis assists in optimal market selection for a product.
• Indirect Competition: Evaluating competitors beyond direct competitors.
• Multiple Frames of Reference: Considering diverse market perspectives.

Points of Parity and Points of Difference

• Establishing Positioning: Involves defining points-of-difference that distinctively position a brand and points-of-parity, which might be common with other brands.
• Points of Difference (PODs): Uniquely identified brand attributes or benefits closely associated with the brand and valued by consumers.
• Points of Parity (POPs): Attributes or benefits of a brand not distinct from other brands within a competitive category.

Figure 2-6: Examples of Negatively Correlated Attributes and Benefits

• Provides examples of attribute pairs (e.g., low price vs. high quality) that may have inverse relationships in consumer perception.

Positioning Guidelines

• Defining and Communicating the Competitive Frame of Reference: Identifying the competitive context for a brand.
• Choosing Points-of-Difference: Defining the unique attributes or benefits that distinguish a brand.
• Establishing Points-of-Parity and Points-of-Difference: Identifying and communicating what distinguishes or is shared between a brand and its competitors.
• Straddle Positions: Brands can straddle multiple points of difference or parity.
• Updating Position Overtime: Adjusting brand positioning as needed.
• Developing a Good Positioning: Developing a brand positioning that considers both present and future.

Defining and Communicating the Competitive Frame of Reference

• Category Benefits: Marketers use product benefits to communicate category membership.
• Exemplars: Well-known brands can be used as examples to define a specific brand's category membership.
• Product Descriptors: Concisely describe a product category using a brand name.

Choosing Points-of-Difference

• Criteria: Defining the key brand attributes, benefits, or aspects that set a brand apart from competitors. Subcategories include desirability, deliverability, and differentiation criteria to evaluate these characteristics.

Establishing Points-of-Parity and Points-of-Difference

• Inverse Brand Associations: Sometimes, points-of-parity and points-of-difference have an inverse relationship in consumers' minds.
• Solutions: These solutions address conflicting relationships or brand attributes:
  • Separating Attributes
  • Leveraging Equity of Another Entity
  • Redefining the Relationship

Straddle Positions

• Positioning a brand that straddles two different frames of reference simultaneously.

Updating Positions Over Time

• Infrequent Changes: Brand positioning usually doesn't undergo significant changes.
• Exceptional Circumstances: Brand adaptation is necessary only when circumstances negatively impact the effectiveness of existing points-of-parity or points-of-difference.
• Evolution: Positioning evolves to reflect market opportunities and changes.
• Modification: Points-of-parity or points-of-difference might be added, dropped, or refined to align with market dynamics.
• Laddering: Enhances a brand's depth and permits further expansion.
• Reacting: Responds to competitors' actions to maintain or improve positioning.
• Redefining and Reinforcing: Redefining brand associations is an option.

Developing a Good Positioning

• A successful brand position needs to be appealing and anticipatory.
• Considers consumers' present motivations and future aspirations.
• Clear value proposition with relevant points-of-parity.
• Relevancy to reflect a consumer point of view.
• Recognizes a blend of rational and emotional considerations.

Defining a Brand Mantra

• Multi-Category Brands: Brands operating in multiple product categories with diverse positioning.
• Brand Essence: Developing a mantra encapsulating the core essence of a brand across all its product lines.
• Guidance: Developing guidelines to direct product introduction, ad campaigns, and sales strategies.

Brand Mantra

• Concise Phrase: Short (three to five words).
• Essence Capture: Should capture the irrefutable essence of brand positioning.
• Guidance: Guiding principle for product choices, ad campaigns, and sales strategies.