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CHAPTER:2
Customer-based
Equity and Brand

 
Positioning

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Learning Objectives
• Define customer-based brand equity.
• Outline the sources and outcomes of customer-based

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brand equity.
• Identify the four components of brand positioning.
• Describe the guidelines in developing a good brand
positioning.
• Explain brand mantra and how it should be developed.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Customer-Based Brand Equity

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Defining Customer-based Brand Equity
(CBBE)

• Approaches brand equity from the perspective of the

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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.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Figure 2.1: Marketing Advantages of
Strong Brands

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Brand Equity as a Bridge

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Copyright © 2015 Pearson India Education Services Pvt. Ltd.
 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 To Sum up ...
Consumers perception of the brand plays a key role in
determining the worth of the brand.

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Brand equity offers guidance to interpret past marketing
performance and design future marketing programs.

Other factors that influence brand success and equity are as

 
follows:
• Employees, suppliers, and channel members.
• Media and government.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Brand Knowledge

Key to create brand equity

• Creates the differential effect that drives brand equity.

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• Marketers need an insightful way to represent how brand
knowledge exists in consumer memory.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Associative Network Memory Model

Views memory as a network of nodes and connecting links.

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• 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.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Figure 2.2: Possible Apple Computer
Associations

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Sources of Brand Equity

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Brand Image

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 To Sum up...

To create brand equity, marketers should:

• Create favorable consumer response i.e. brand

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awareness.
• Create positive brand image though brand associations
that are strong, favorable, and unique.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Identifying and Establishing Brand
Positioning

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Basic Concepts

Brand positioning

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• 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.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Target Market
Market segmentation: Divides the market into distinct
groups of homogeneous consumers who have similar needs

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and consumer behavior.

Involves identifying segmentation bases and criteria

• Criteria
• Identifiability

 
• Size
• Accessibility
• Responsiveness

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Figure 2.3: Consumer Segmentation
Bases

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Figure 2.4: Business-to-Business
Segmentation Bases

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Figure 2.5: Hypothetical Examples
of Funnel Stages and Transitions

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Nature of Competition
• Competitive analysis

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• Indirect competition

• Multiple frames reference

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Points of Parity and Points of
Difference
• Points-of-difference associations

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• Points-of-parity associations

• Points-of-parity versus points-of-difference

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 To Sum up…
To appropriately position a brand, marketers should:
• Identify their target customers.

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• Analyze the type of competition they might face in the
identified market base.
• Identify product features and associations that are different
or similar to their competitors.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Positioning Guidelines

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Defining and Communicating the
Competitive Frame of Reference
• Category membership

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• POP’s and POD’s
• Three main ways to convey a brand’s category membership
1. Communicating category benefits
– An industrial motor might claim for power and analgesic for its efficacy.
Main purpose is not to create superiority but to establish POP.
2. Comparing to exemplars
– When Tommy Hilfiger was an unknown brand designer, advertising

 
announced his membership as a great American designer by associating
him with Geoffrey Beene, Stanley Blacker etc.
3. Product Descriptor:
– The product descriptor that follows the brand name is often a very
compact means of conveying category origin. For eg USAir--- US
Airways.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Choosing Points-of-Difference

• A brand must offer a compelling and credible reason for choosing it

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over the other options.
• Three key considerations for determining whether the attribute or
benefit can serve as POD is
1. Desirability Criteria(personally relevant and important, For eg.
Apple and Eve’s pure, natural fruit juice for healthy minded
beverage market)

 
2. Deliverability Criteria
○ It depends upon both a company’s actual ability to make the
product or service( feasibility, eg Moutain Dew, more energising
soft drink) as well as their effectiveness in convincing consumers
of their ability to do so. ( Communicability) i.e proof points. POM
wonderful 100 % Pomogranate juice battled with FTC on
medicinal benefits for the juice

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
• Differentiation Criteria

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finally the target customers must find the POD distinctive and
superior. Also to find a viable, long term basis of
differntiation.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Establishing Points-of-Parity and
Points-of-Difference
• In creating both POP and POD one of the challenges in

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positioning is the inverse relationships that exist in the minds
of many consumers. The competitors even worsen up the
thing by showcasing such attributes.
• The following three approaches are listed in increasing order
of effectiveness-but also increasing order of difficulty.

 
• Separate the attributes ( Head and Shoulders met success
in Europe with a dual campaign, one emphasized on dandruff
removal efficacy and other on appearance and beauty of hair
after use. But its costly
• Leverage Equity of another equity
• Redefine the relationship

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
Leverage Equity of another equity

Copyright © 2015 Pearson India Education Services Pvt. Ltd.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Copyright © 2015 Pearson India Education Services Pvt. Ltd.
 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Straddle Positions

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Copyright © 2015 Pearson India Education Services Pvt. Ltd.
 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Developing a good positioning

• Foot in the present and a foot in the future

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• Identify all relevant POP, Competitors POD will in turn become
the brand’s POP.
• A good positioning should reflect a consumer point of view in
terms of the benefits that consumers derive from the brand.
In short what benefits would a consumer get from that unique

 
attribute is more important.
• A good positioning contains POD and POP that appeals both to
the heart and the head.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Brand Mantra

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Defining Brand Mantra

• It’s a short, three to five word phrase that captures the

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irrefutable essence or spirit of the brand positioning. It is
similar to brand essence or core brand promise and its
purpose is to ensure that all employees and external
marketing partners understand what the brand most
fundamentally is to represent to consumers so they can adjust

 
their actions accordingly.
• For eg. McDonald’s brand philosophy of “FOOD, FOLKS and
FUN” nicely captures its brand essence and core brand
promise.

Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e

By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Nike

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Disney

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Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 To Sum up...

A good brand mantra should:

• Communicate the category of the business to set the brand

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boundaries and clarify what is unique about the brand.
• Be simple, crisp, and vivid.
• Stake out ground that is personally meaningful and relevant
to as many employees as possible.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob
 Copyright © 2015 Pearson India Education Services Pvt. Ltd.
Thank you.

 
Strategic Brand Management: Building, Measuring, and Managing Brand Equity, 4e
By Kevin Lane Keller, Ambi M. G. Parameswaran and Isaac Jacob