Strategic Brand Management: Building, Measuring, and Managing Brand Equity PDF

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 2 Customer-Based Brand Equity and Brand...

Strategic Brand Management: Building, Measuring, and Managing Brand Equity Fifth Edition, Global Edition Chapter 2 Customer-Based Brand Equity and Brand Positioning Copyright © 2020 Pearson Education Ltd. All Rights Reserved Learning Objectives 2.1 Define customer-based brand equity 2.2 Outline the sources and outcomes of customer based brand equity 2.3 Identify the four components of brand positioning 2.4 Describe the guidelines in developing a good brand positioning 2.5 Explain brand mantras and how they should be developed Copyright © 2020 Pearson Education Ltd. All Rights Reserved Customer-Based Brand Equity Defining Customer-Based Brand Equity Brand Equity as a Bridge Copyright © 2020 Pearson Education Ltd. All Rights Reserved Defining Customer-Based Brand Equity Approaches brand equity from the perspective of the consumer Stresses that the power of a brand lies in what resides in the minds and hearts of customers Differential effect that brand knowledge has on consumer response to the marketing of that brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-1: Marketing Advantages of Strong Brands Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions Less vulnerability to marketing crises Larger margins More inelastic consumer response to price increases More elastic consumer response to price decreases Greater trade cooperation and support Increased marketing communication effectiveness Possible licensing opportunities Additional brand extension opportunities Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Equity as a Bridge Customer knowledge drives the differences that manifest themselves in terms of brand equity: – Provides marketers with a vital strategic bridge from their past to their future – The brand knowledge that marketers create over time dictates appropriate and inappropriate future directions for the brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Making a Brand Strong: Brand Knowledge (1 of 3) From the perspective of the CBBE concept, brand knowledge is the key to creating brand equity: – It creates the differential effect that drives brand equity Marketers need an insightful way to represent how brand knowledge exists in consumer memory Copyright © 2020 Pearson Education Ltd. All Rights Reserved Making a Brand Strong: Brand Knowledge (2 of 3) The associative network memory model: – Views memory as a network of nodes and connecting links: ▪ Nodes—Represent stored information or concepts ▪ Links—Represent the strength of association between the nodes Brand associations are informational nodes linked to the brand node in memory Copyright © 2020 Pearson Education Ltd. All Rights Reserved Making a Brand Strong: Brand Knowledge (3 of 3) Brand knowledge has two components: – Brand awareness: ▪ Related to the strength of the brand node or trace in memory ▪ Often a step in building brand equity ▪ Often come into play – Brand image: ▪ Consumers’ perceptions about a brand, as reflected by the brand associations held in consumer memory Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-2: Possible Associations with the Apple Brand Name Copyright © 2020 Pearson Education Ltd. All Rights Reserved Sources of Brand Equity Brand Awareness Brand Image Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Awareness (1 of 3) Brand awareness consists of brand recognition and brand recall performance: – Brand recognition: ▪ Consumer’s ability to confirm prior exposure to the brand when given the brand as a cue – Brand recall: ▪ Consumers’ ability to retrieve the brand from memory when given: – The product category – The needs fulfilled by the category, or – A purchase or usage situation as a cue Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Awareness (2 of 3) Advantages of brand awareness: – Learning advantages – Consideration advantages – Choice advantages: ▪ Consumer purchase motivation ▪ Consumer purchase ability ▪ Consumer purchase opportunity Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Awareness (3 of 3) Anything that causes consumers to experience one of a brand’s element can increase familiarity and awareness of that brand element: – Name, symbol, logo, character, packaging, or slogan, including advertising and promotion, sponsorship and event marketing, publicity and public relations, and outdoor advertising Repetition increases recognizability: – But improving brand recall also requires linkages in memory to product aspects Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Image (1 of 2) Once a sufficient level of brand awareness is created: – Marketers can put more emphasis on crafting a brand image Creating a positive brand image: – Takes marketing programs that link strong, favorable, and unique associations to the brand in memory Brand associations may be either brand attributes or benefits Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Image (2 of 2) Strength of Brand Associations – More deeply a person thinks about product information and relates it to existing brand knowledge, stronger is the resulting brand association Favorability of Brand Associations – Is higher when a brand possesses relevant attributes and benefits that satisfy consumer needs and wants Uniqueness of Brand Associations – “Unique selling proposition” of the product – Provides brands with sustainable competitive advantage Copyright © 2020 Pearson Education Ltd. All Rights Reserved Identifying and Establishing Brand Positioning Basic Concepts Target Market Nature of Competition Points-of-Parity and Points-of-Difference Copyright © 2020 Pearson Education Ltd. All Rights Reserved Basic Concepts Brand positioning: – Act of designing the company’s offer and image so that it occupies a distinct and valued place in the target customers’ minds – Finding the proper “location” in the minds of consumers or market segment – Allows consumers to think about a product or service in the “right” perspective Copyright © 2020 Pearson Education Ltd. All Rights Reserved Target Market Market segmentation: Divides the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior Involves identifying segmentation bases and criteria: – Criteria: ▪ Identifiability ▪ Size ▪ Accessibility ▪ Responsiveness Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-3: Consumer Segmentation Bases Behavioral Psychographic User status Values, opinions, and attitudes Usage rate Activities and lifestyle Usage occasion Geographic Brand loyalty International Benefits sought Regional Demographic Income Age Sex Race Family Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-4: Business-to-Business Segmentation Bases Nature of Good Kind Where used Type of buy Buying Condition Purchase location Who buys Type of buy Demographic SIC code Number of employees Number of production workers Annual sales volume Number of establishments Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-5: Hypothetical Examples of Funnel Stages and Transitions Copyright © 2020 Pearson Education Ltd. All Rights Reserved Nature of Competition A competitive analysis considers an array of factors: – Resources, capabilities, and likely intentions of various other firms – This competitive analysis helps marketers to choose markets for their own products or services When choosing a market, marketers must consider: – Indirect competition – Multiple frames reference Copyright © 2020 Pearson Education Ltd. All Rights Reserved Points of Parity and Points of Difference A marketer must arrive at the proper positioning: – This requires establishing the correct points-of- difference and points-of-parity associations: ▪ Points-of-difference (PODs): – Formally defined as attributes or benefits that consumers strongly associate with a brand ▪ Points-of-parity associations: – Not necessarily unique to the brand but may be shared with other brands Copyright © 2020 Pearson Education Ltd. All Rights Reserved Figure 2-6: Examples of Negatively Correlated Attributes and Benefits Low price versus high quality Taste versus low calories Nutritious versus good tasting Efficacious versus mild Powerful versus safe Strong versus refined Ubiquitous versus exclusive Varied versus simple Copyright © 2020 Pearson Education Ltd. All Rights Reserved Positioning Guidelines Defining and Communicating the Competitive Frame of Reference Choosing Points-of-Difference Establishing Points-of-Parity and Points-of-Difference Straddle Positions Updating Position Overtime Developing a Good Positioning Copyright © 2020 Pearson Education Ltd. All Rights Reserved Defining and Communicating the Competitive Frame of Reference Communicating category benefits: – Marketers use product benefits to announce category membership Exemplars: – Well-known, noteworthy brands in a category can also be used as exemplars to specify a brand’s category membership Product descriptor: – Product descriptor that follows a brand name is often a very compact means of conveying category origin Copyright © 2020 Pearson Education Ltd. All Rights Reserved Choosing Points-of-Difference A brand must offer a compelling and credible reason for choosing it over the other options: – What attribute or benefit can serve as point-of- difference? ▪ Desirability criteria ▪ Deliverability criteria ▪ Differentiation criteria Copyright © 2020 Pearson Education Ltd. All Rights Reserved Establishing Points-of-Parity and Points-of-Difference The key to branding success is to establish both points-of- parity and points-of-difference At times, an inverse relationship between POP and POD may exist in the minds of consumers: – Approaches to address the problem of negatively correlated POPs and PODs include: ▪ Separating the attributes ▪ Leveraging equity of another entity ▪ Redefining the relationship Copyright © 2020 Pearson Education Ltd. All Rights Reserved Straddle Positions Type of positioning where a company is able to straddle two frames of reference: – With one set of points-of-difference and points-of-parity – The points-of-difference in one category: ▪ Become points-of-parity in the other ▪ And vice-versa for points-of-parity Copyright © 2020 Pearson Education Ltd. All Rights Reserved Updating Positions over Time (1 of 2) Generally, positioning should be fundamentally changed very infrequently: – And only when circumstances significantly reduce the effectiveness of existing POPs and PODs Yet, positioning will evolve to better reflect market opportunities or challenges POD or POP may be refined, added, or dropped as situations dictate Copyright © 2020 Pearson Education Ltd. All Rights Reserved Updating Positions over Time (2 of 2) Laddering: – Deepening the meaning of a brand to permit further expansion – Often useful to explore underlying consumer motivations Reacting: – Responding to competitive actions that threaten an existing positioning – Competitive actions are often directed at eliminating points-of-difference to make them points-of-parity: ▪ Or to strengthen or establish new points-of-difference Copyright © 2020 Pearson Education Ltd. All Rights Reserved Developing a Good Positioning A good positioning: – Has a foot in the present and a foot in the future: ▪ Needs to be somewhat aspirational so that the brand has room to grow and improve – Is careful to identify all relevant points-of-parity: ▪ Don’t overlook or ignore crucial areas where the brand is potentially disadvantaged – Should reflect a consumer point of view in terms of the benefits that consumers derive from the brand – Recognizes that a duality exists in the positioning of a brand: ▪ Rational and emotional components Copyright © 2020 Pearson Education Ltd. All Rights Reserved Defining a Brand Mantra Brands may span multiple product categories and may have multiple distinct—yet related—positionings As brands evolve and expand across categories: – Marketers will want to craft a brand mantra that reflects the essential heart and soul of the brand Copyright © 2020 Pearson Education Ltd. All Rights Reserved Brand Mantra Short, three-to five-word phrase: – Captures the irrefutable essence or spirit of the brand positioning Provides guidance about: – What products to introduce under the brand – What ad campaigns to run – Where and how the brand should be sold Copyright © 2020 Pearson Education Ltd. All Rights Reserved