Brand Equity Class 2, UCD Business, PDF

d housekeeping 01 Group formation • • • 02 If you want, form your own group of six and let me know via email ([email protected]) by Class 3 (Sep 26) If your group is smaller than six, still let me know – I will assign more students to your group Otherwise, I will assign you to a group after Class...

d housekeeping 01 Group formation • • • 02 If you want, form your own group of six and let me know via email ([email protected]) by Class 3 (Sep 26) If your group is smaller than six, still let me know – I will assign more students to your group Otherwise, I will assign you to a group after Class 3 and post on Brightspace on next Wed (Sep 27) Class participation • • Assessment will begin once class list is set Assessed based on in-class participation & Brightspace activity d housekeeping 03 Brand audit project: When choosing a brand, avoid • • • • • mega / multinational corporations (e.g., Meta, Apple, etc.) brands that are doing too well (e.g., McDonald’s): What kinds of suggestions can you provide? brands that you cannot get info (e.g., investor report) online brands you can find a lot of student reports online (e.g., Red Bull): You have nothing to learn, your judgment will be colored by others’ which is likely to be worse than yours Students tend to get better grades when they chose a relatively new and under-studied brand - Be creative! (e.g., BTS, local phone accessory brand) CLASS 2-1 BRAND EQUITY Q Definition of brand? § review § Brand is a “name, term, sign, symbol, or design, or a combination of these elements, intended for consumers to identify the goods and services of one seller or group of sellers and to differentiate them from those of competition.” Brands are intangible, but they exist in consumers’ minds (brand knowledge: source of brand equity). Q What can be considered a brand? § Virtually everything - physical goods, services, retailers and distributors, people and organizations, sport, arts, and entertainment, geographic locations # Define “brand equity” agenda f # Outline the sources and outcomes of brand equity # Understand the ground rules for choosing brand associations to establish positive brand equity BRAND KNOWLEDGE Source of brand equity § The source of brand equity lies in the minds of customers § Brand knowledge is shaped by what consumers have learned, felt, seen, and heard (i.e., information acquired) about the brand over time § Attitudes (i.e., evaluation of a brand) and behavioral responses (e.g., purchase, demand) are end-outcomes of processing new info based on prior brand knowledge BRAND KNOWLEDGE How brand knowledge is shaped Input (Information) Output (Behavior: Observed) TV commercial Past experience-feeling Word-of-mouth Product design Brand name Purchase Loyalty Preference Attitude (Feeling+Judgment) Willingness to recommend § At time 1, information about a brand shapes brand knowledge § At time 2, when exposed to the brand again through marketing activities, (a) brand knowledge determines how positively consumers respond to it; and in parallel, (b) brand knowledge is updated BRAND EQUITY Definition (1/2) § Differential effect that brand knowledge has on consumer response to marketing activities of the particular brand § Brand equity is the effect of a marketing activity (e.g., advertisement) captured by responses (e.g., sales) uniquely attributable to brand knowledge, independent from other factors associated with change in consumer responses to the marketing activity § Sales change = a + b*(consumers’ brand knowledge) + c*(ad persuasiveness) + d*(ad frequency) + e*(time of ad shown) + … BRAND EQUITY Definition (2/2) § Differential effect that brand knowledge has on consumer response to marketing activities of the particular brand § It suggests that the same marketing activity can predict different behavioral outcomes depending on brand knowledge. § How to maximize marketing effectiveness minimizing cost: leveraging consumers’ brand knowledge HOW BRAND EQUITY MANIFESTS Blind test (1/3) § Blind test is a tool to measure brand equity § Blind test measures the product perception difference when consumers know vs. do not know the brand they’re testing § The power of brand equity: Coke vs. Pepsi § When brand names are unknown, people report to like Pepsi more (even your brain activities show that!) § When brand names are known, people report to like Coke more (even your brain activities show that, again!) HOW BRAND EQUITY MANIFESTS Blind test (2/3) https://www.youtube.com/watch?v=G7Sl7EaFYAI&ab_channel=BuzzFeedVideo HOW BRAND EQUITY MANIFESTS Blind test (3/3) § How does this guy make his purchase decision on coffee? § What can we learn from this video? § Supposed the guy represents the entire consumer population, is Dunkin Donuts’ brand equity good? d HOW BRAND EQUITY MANIFESTS § Positive brand equity: When consumers react more favourably to a product when the brand is identified (vs. when it is not identified or named fictitiously) § Negative brand equity: When consumers react less favorably or show no difference in response to a product when the brand is identified (vs. when it is not identified or named ficticiously) d HOW BRAND KNOWLEDGE IS STORED IN MIND § The Associative Network Memory Model represents how brand knowledge exists in consumer memory § This model applies to knowledge about other objects as well § Views memory as a network of nodes and links about meaningfully related concepts § Nodes: Represent stored information or concepts associated with a brand § Links: Represent the strength of association between the nodes BRAND KNOWLEDGE How information is stored WORD-COMPLETION TASK 1 ANSWER AS FAST AS POSSIBLE! (+) SIGN MEANS FOCUS. BRAND KNOWLEDGE How information is stored JUICE BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored BREAD BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored MILK BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored SO__P BRAND KNOWLEDGE How information is stored WORD-COMPLETION TASK 2 ANSWER AS FAST AS POSSIBLE! (+) SIGN MEANS FOCUS. BRAND KNOWLEDGE How information is stored TOWEL BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored SHAMPOO BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored SHOWER BRAND KNOWLEDGE How information is stored + BRAND KNOWLEDGE How information is stored SO__P BRAND KNOWLEDGE How information is stored node Represent stored information or concepts associated with a brand JUICE BREAD FOOD TOWEL MILK SHOWER link SOUP BATH SHAMPOO Represent the strength of association between the nodes SO__P SOAP BRAND KNOWLEDGE Example: apple Expensive iPhone Userfriendly interface MacBook Popular brand Innovation Creative Samsung BRAND EQUITY Its relation to brand management § Brand equity is the marketing effects (e.g., sales, likability, preference, loyalty, etc.) uniquely attributable to a brand § Brand management means all marketing activities (e.g., promotion, pricing) aimed at building and managing brand knowledge to produce positive brand equity CLASS 2-2 COMPONENTS OF BRAND KNOWLEDGE d COMPONENTS OF BRAND KNOWLEDGE § Brand Awareness § Ability to recall or recognize a brand under different conditions § Dependent on the strength of the link to trace in memory § Necessary condition to build brand knowledge § Brand Image § Meaning of a brand for consumers § Product characteristics or symbolic meanings attached to a brand § Informational nodes about a brand held in memory d COMPONENTS OF BRAND KNOWLEDGE Expensive iPhone Userfriendly interface MacBook Consumer Electronics Popular brand Innovation Creative Samsung d BRAND AWARENESS § Brand Recognition § Consumer’s ability to confirm prior exposure to the brand, given the brand as a cue § Brand Recall § Consumer’s ability to retrieve the brand name from memory cues such as § Product category § Needs fulfilled by the product category § A purchase or usage situation BRAND AWARENESS Advantages for heightening brand awareness (1/2) § Learning advantage § Increasing brand awareness (i.e., central node) should precede forming and strengthening associations, which make up the brand image (i.e., peripheral nodes) § Consideration advantage § Increasing brand awareness increases the likelihood the brand will be included in the consideration set. BRAND AWARENESS Advantages for heightening brand awareness (2/2) § Choice advantage § Awareness can affect choice without other associations § If consumers use decision rules to buy familiar brands (i.e., familiarity heuristic) or § If they are in low involvement decision settings. BRAND AWARENESS How to build brand awareness: repeated exposure (1/3) https://www.youtube.com/watch?v=Ktd6NBVFL6c BRAND AWARENESS How to build brand awareness: repeated exposure (2/3) BRAND AWARENESS How to build brand awareness: repeated exposure (3/3) d BRAND IMAGE § Concepts associated with a brand in brand knowledge § Measured by asking about brand meaning or associations § Two kinds of brand image § Brand attributes: Descriptive features that characterize a product or service § Brand benefits: Personal values and meanings consumers attach to the product or service BRAND IMAGE Brand attributes § Product-related attributes § Features intrinsic to a product or service § Non-product-related attributes § Price § Feelings and experiences BRAND IMAGE Brand benefits § Functional benefits: § Attributes that help solve a problem § Experiential benefits: § Attributes that satisfy sensory needs like sight, taste, sound, smell or feel § Symbolic benefits: § Attributes that satisfy underlying need for social approval or personal expression BRAND IMAGE Example: The Body Shop (1/2) I liked this brand when I tried it before! Clean my body Middlerange price Flowery Natural raw ingredients Environme ntal awareness Ecofriendly bottle Against animal testing BRAND IMAGE What types of associations should be chosen (1/3) § Favorable associations § Attributes and benefits that target consumers like § Due to misattribution: Positive emotions induced from positive attributes or benefits misattributed to liking of a brand -> increases liking of the brand (same as how advertising works) § Secondary associations that are not innate to the product help: Celebrity endorsement, aesthetic product design, amusing jingle BRAND IMAGE What types of associations should be chosen (2/3) § Associations strongly related to pre-existing associations § Relevant to and consistent with the existing associations § Again, due to misattribution: Ease of processing misattributed to liking of a brand -> increases liking of the brand BRAND IMAGE What types of associations should be chosen (3/3) § Unique associations § Determine positioning: enhance activation of thoughts related to the brand yet deterring activation of thoughts related to competitors’ § Unique selling proposition (i.e., point-of-difference) of the product: Provides brand with sustainable competitive advantage BRAND IMAGE Example: The Body Shop (2/2) Personal Hygiene I liked this brand when I tried it before! Clean my body Middlerange price Flowery Natural raw ingredients Environme ntal awareness Cosmetics Ecofriendly bottle Against animal testing d NEXT CLASS 01 Brand elements to shape brand knowledge 02 The (not-so-obvious) effects of counterfeits on the original brands