Brand Management

Chapter 2. Customer-based brand equity & brand positioning

Objectives

1. Define customer-based brand equity

2. Outline the sources and outcomes of CBBE
3. Identify the four components of brand positioning
4. Describe the guidelines in developing a good brand positioning
5. Explain brand mantra and how it should be developed
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 mi
nds and hearts of customers
• Differential effect that brand knowledge has on consumer resp
onse to the marketing of that brand
Marketing
advantages of
strong brands
Korea Brand Power Index(K-BPI) by Korea Management Association Consultants Inc.

K-BPI Model Measurements

K-BPI
Image
Brand Awareness Brand Loyalty
• Top of Mind Brand in • Image Purchase
• Brand recall • Purchase intention
market
• Brand recognition intention
• Preference
Preference

Overview of K-BPI

Brand Awareness Brand Loyalty

• Top of Mind • Image • X1 = Top of Mind
• Brand recall • Purchase • X2 = Brand recall (unaided awareness)
= unaided awareness intention • X3 = Brand recognition (aided awareness)
• Brand recognition • Preference
• X4 = Brand loyalty
= aided awareness
Associative Network Memory Model

• It views memory as a network of nodes and connecting links

• Nodes : stored information or concepts
• Links : the strength of association between the nodes

Brand image
Perceptions about a
brand, as reflected by the
brand associations held in
consumer memory
fruits
Secondary association

Brand awareness
Related to the strength of the brand
node in memory
 Source of Brand equity

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
Brand Awareness • Generally difficult than brand recognition

brand • Consumers’ ability to confirm prior exposure to the brand

recognition when given the brand as a cue
• Impulsive purchase

• The more deeply a consumer thinks about the product

Strength of brand information and relates it to existing brand knowledge,
association
the stronger the resulting brand association will be
• Personal relevance and the consistency

Favorability of • when the brand possess relevant attributes and

Brand Image brand association benefits that satisfy their needs and wants

Uniqueness of • Differentiate from competitors

brand association • Sustainable competitive advantage that gives
consumers a compelling reason to buy
Krishnan(1996), Characteristics of
memory associations: A consumer-
based brand equity perspective,
International Journal of Research in
Marketing
Brand Awareness

Advantages of Brand Awareness

• Learning advantages
• Consideration advantages : Raising brand awareness increases likelihood that the
brand will be a member of the consideration set, the handful of brands that receive
serious consideration for purchase.
• Choice advantages: It can affect choices among brands in the consideration set, even
if there are essentially no other associations to those brands.
* elaboration likelihood model :
A theory of persuasion that suggests that there are two different ways people can be persuaded of
something, depending on how invested they are in a topic.
 Brand Awareness – Brand recognition & Brand recall

Brand recognition Brand recall

• Impulsive buying • category needs-> brand recall

• Brand recognition -> triggers the category need • Most of time it entails verbal process

• describe the needs about the product category • establish and fortify the association between
in commercial the needs for the product category & the
• Visual and/or auditory appeal brand by putting the brand name in the
: expose package or brand logo more than 2sec advert copy

• Place the product at eye level

 Brand Image

Strength of brand association

• Determined by the numbers and thickness of the links

• Personal relevance and the consistency is important
• a) exposing at the point of purchase b) consistency c) elaborated effort matters to make the link ticker

Favorability of brand association

• Is higher when a brand possesses relevant attributes and benefits that satisfy consumer needs & want
• Consumers tend to make an integrated evaluation with a series of brand associations.
• Brand manager needs to put as many favorable & positive associations as possible in consumers.

Uniqueness of brand association

• “Unique selling proposition” of the product

• Provides brands with sustainable competitive advantage
• Still need the general, similar benefits that competing brands in the same product category also
have. (insight from Categorization theory)
Brand Image
 Brand Positioning

• The act of designing the company’s offer and image so that it occupies a distinct and valued
place in the target customer’s minds.
• 1) who the target consumer is 2) who the main competitors are 3) how the brand is similar
(and different) to these competitors

Market • Divides the market into distinct groups of homogeneous consumers who have
segmentation similar needs and behavior, and who thus require similar marketing mixes.
• Segmentation Bases
Consumer B2B
segmentation segmentation
bases bases
 Brand Positioning – Target market

Bases Benefit • The sensory segment : Seeking flavor and product appreance
Sought • The sociable : Seeking brightness of teeth
• The worries : Seeking decay prevention
• The independent segment : Seeking low price

Most of brands emphasize multiple performance benefits

Criteria

• Identifiability: Can we easily identify the segment?

• Size: Is there adequate sales potential in the segment?
• Accessibility: Are specialized distribution outlets and communication media available
to reach the segment?
• Responsiveness: How favorably will the segment respond to a tailored marketing
program?
 Nature of competition

• Indirect competition:
Not to define competition too narrowly
Competition often occurs at the benefit level rather than the attribute level
• Multiple frames reference
: It’s common for a brand to identify more than one frame of reference.

 Quick-serve restaurants (McDonald's & Dunkin Donuts)

 Supermarket brands (Maxim, Nescafe)
 Local cafes
 PoP & PoD

Points-of-Difference associations

• Attributes or benefits that consumers strongly associate with a brand, positively

evaluate, and believe that they could not find to the same extent with a competitive
brand
• Functional, performance-related vs. abstract, imagery-related considerations
• PoDs may rely on performance attributes or benefits as well as imagery associations.
• These benefits often have important underlying proof points or reasons to believe.

Points-of-Parity associations

• PoPs are not necessarily unique to the brand but may in fact be shared with other brands.
 Category point-of-parity : represent necessary-but not necessarily sufficient-conditions for brand choice.
 Competitive point-of-parity : are those associations designed to negate competitors' PoD.
 Correlational point-of-parity : are those potentially negative associations that arise from the existence of

other, more positive associations for the brand.

PoP & PoD
PoP & PoD

Examples on Negatively Correlated Attributes and Benefits

Low price vs. high quality

Taste vs. low calories

Nutritious Vs. good tasting

Efficacious vs. mild

Powerful vs. safe

Strong vs. refined

Ubiquitous vs. exclusive

Varied vs. simple

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

Positioning Guidelines - 1. Defining & communicating the competitive frame of reference

• Not to define competition too narrowly

• Determine category membership
• To inform consumers of a brand’s category membership

Communicating category benefits

• To reassure consumers that a brand will deliver on the fundamental reason for using a
category, marketers frequently use benefits to announce category membership

Exemplars

• Well-known, noteworthy brands in a category to be used as exemplars to specify a brand’s

category membership. Ex) pork was “the Other White Meat” by The national Pork Board

Product descriptor

• The product descriptor that follows the brand name is often a very compact means of
conveying category origin.
Positioning Guidelines - 1. Defining & communicating the competitive frame of reference

Although carrots were a primary ingredient, V8 splash deliberately

avoided invoking the vegetable in the brand name, given its
sometimes negative connotations.
 Positioning Guidelines - 2. Choosing PoD

• The brand association must be seen as desirable, deliverable, and differentiating.

• Desirability is determined from the consumer’s point of view, deliverability is based on a
company’s inherent capabilities, and differentiation is determined relative to the competitors.
• These 3 considerations for developing an optimal positioning align with the 3 perspectives on
which any brand must be evaluated, namely the consumer, the company, and the competition.

desirability  Target consumers must find PoD personally relevant and important.

 The deliverability of an attribute or benefit brand association depends on

deliverability both a company’s actual ability to make the product or service(feasibility)
as well as their effectiveness in convincing consumers of their ability to do
so (communication).

differentiation  Target consumers must find the PoD distinctive and superior.
 Positioning Guidelines - 3. Establishing PoP & PoD

• The key to branding success is to establish both PoPs and PoDs.

• One challenges in positioning is the inverse relationships that may exist in the minds of
many consumers. – Consumer typically want to maximize both the negatively correlated
attributes and benefits.

Separate the attributes • Launch 2 different marketing campaigns, each devoted to a different
brand attribute or benefit
• The downsides are – expensive, 2 strong campaigns have to be developed.

Leverage equity of • Brands can link themselves to any kind of entity that possesses the right
another entity kind of equity.
• Cost and risk exist.

• Address the negative relationship btw attributes and benefits is

Redefine the relationship
in fact positive.
• Difficult to achieve
Positioning Guidelines - 3. Establishing PoP & PoD
 Positioning Guidelines - 4. Straddle Positions & 5. Updating positioning overtime

Straddle Positions

• Straddle two frames of reference with one set of PoPs and PoDs
• BMW : positioned as being the only automobile that offered both luxury and performance.
Luxury car: PoD(Performance), PoP(luxurious)
Performance car: PoD (luxurious), PoP(performance)

Updating positioning overtime

• Positioning should be fundamentally changed very infrequently and only when circumstances
significantly reduce the effectiveness of existing PoPs and PoDs.
Defining A Brand Mantra

• A short, three-to five- word phrase that captures the irrefutable essence of spirit of
the brand postioning
• Similar to brand essence or core brand promise
• Its purpose is to ensure that all employess and external marketing partnes understand
what the brand most fundamentally is to represent to consumers so thay can adjust
their actions accordingly
• It helps the brand present a consistent image
Designing A Brand Mantra

Brand Function Descriptive Modifier Emotional Modifier

Performance Athletic Authentic

Entertainment Family Fun

The nature of the product or It further clarifies its nature. How exactly does the brand
service or the type of experiences Combined, the brand function provide benefits and in
or benefits the brand provides. term and descriptive modifier what ways?
help delineate the brand
boundaries.
Implementing A Brand Mantra

• It should be developed at the same time as the brand positioning.

• Marketers can often summarize the brand positioning in a few sentences or a short
paragraph that suggests the ideal core brand associations consumers should hold.
• Based on these core brand associations, a brainstorming session can attempt to
identify PoDs, PoPs, and different brand mantra candidates
• Considerations  Communicate
 Simplify
 Inspire