1/23/2017

ESC RENNES SCHOOL OF BUSINESS

NEW PRODUCTS
AND
BRAND MANAGEMENT (MK442E)
LECTURE-2: BRAND EQUITY
20/Jan/2017
Assist. Prof. Pradeep DIVAKARAN
(Course Co-ordinator)
Office 320, Department of Marketing

Email: pradeep.divakaran@esc-rennes.com

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

RECAP OF LECTURE-1
What is a brand? Why do they matter?
Brand Elements.
Difference between products and brands
Role of brands from Customer and Firm
perspective
What could be branded?
Influence on decision making
Branding, Branding Strategies
Branding Challenges and Opportunities

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

TODAYS SESSION
CREATING AND MANAGING BRAND EQUITY
Customer-based Brand Equity (CBBE)
Brand Knowledge for Strong Brands
Sources of Brand Equity B. Awareness and B. Image

Building Strong Brands - Brand Resonance Pyramid

Aakers Brand Determinants
Brand Loyalty, Brand Awareness, Perceived Quality, Brand
Associations

Article presentation
Group Presentation (GP) (7-8 minutes each group)

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND EQUITY
Brand Equity (BE) - is the added value endowed on
products and services, which may be reflected in the
way consumers, think, feel, and act with respect to
the brand as well as in the prices, market share &
profitability the brand commands for the firm

Customer Individual or an Organization

CBBE Model to explain what BE is and how it is built,

measured and managed

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

TO ILLUSTRATE CBBE
Beer tasting experiment by Larry Percy

Keller K L. Strategic Brand Management, 3rd Edition, Prentice Hall, 2008, p 49-50.

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CUSTOMER-BASED BRAND EQUITY(CBBE)

Fundamental Questions: What Brands MEAN to

consumer? How B. Knowledge affects their responses?
Basic Premise: Power of brand Lies in MINDS of
Customers
Learnt, Felt, Seen or Heard about the Brand

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CUSTOMER-BASED BRAND EQUITY(CBBE)

CBBE is the differential effect that brand
knowledge has on consumer response to the
marketing of that brand

POSITIVE equity
When consumer react favorably to marketing activity

NEGATIVE equity
Consumers react less favorably

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CUSTOMER-BASED BRAND EQUITY

Key Ingredients of Customer-based brand equity
1. Equity arises from differences in customer responses

2. Differences in responses are a result of Brand knowledge

3. Differences is reflected in perceptions, preferences &

behavior related to all aspects of marketing a brand

Marketing Challenge-to build a strong brand

1. Ensure customer have right type of experiences with product & services
2. Marketing programs-to create the desired brand knowledge

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

ADVANTAGES OF STRONG BRANDS

Improved perceptions of More inelastic consumer
product performance response

Greater loyalty Greater trade cooperation

Less vulnerability to Increased marketing

competitive marketing communications
actions effectiveness
Less vulnerability to crisis
Possible licensing
opportunities
Larger margins

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND EQUITY AS A BRIDGE

Reflection of past investments in the marketing of
a brand investments in what customers have
learnt, felt, and experienced about the brand
Direction for future marketing actions or programs

NOT an expense BUT an investment for future

NOT about quantity of investment, BUT the quality

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BUILDING A BRAND STRONG:

BRAND KNOWLEDGE

Brand knowledge is the key to creating brand equity.

Brand knowledge consists of a brand node in
memory with a variety of associations linked to it.
Brand knowledge has two components:
Brand Awareness Strength of Brand Node
Brand Image Variety of Associations

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND KNOWLEDGE

Thoughts Feelings

Knowledge

Beliefs Images

Experiences

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

POSSIBLE APPLE COMPUTER ASSOCIATIONS

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

NODE AND ASSOCIATIONS

Source: http://dnamemyblog.blogspot.com/

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

SOURCES OF BRAND EQUITY

Brand awareness Increased Levels of,
Brand recognition decision making at purchase point
Brand recall decision making in away setting e.g., online

Brand image
Strong, favorable, and unique brand associations

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND AWARENESS ADVANTAGES

Learning advantages
Register the brand in the minds of consumers
Consideration advantages
Likelihood that the brand will be a member of the
consideration set
Choice advantages
Affect choices among brands in the consideration set

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

ESTABLISHING BRAND AWARENESS

Increasing the familiarity of the brand through
repeated exposure (for brand recognition)

Forging strong associations with the appropriate

product category or other relevant purchase or
consumption cues (for brand recall)

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND IMAGE
BRAND ASSOCIATIONS

Strong

Unique

Favorable

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

THE BODY SHOP - EXAMPLE

Created a global brand without using conventional
ads
Strong associations to personal care and
environmental concerns, through
Products natural ingredients only, never tested on animals
Packaging - recyclable, refillable
Merchandising detailed point of sale posters, brochures, and displays

Staff enthusiastic, & informative about environmental issues

Sourcing policies using small local producers

Social action program requirement for franchisee to run a local

community program
PR relations programs & activities outspoken stands on various issues

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND IMAGE
STRENGTH of Brand Association
Personal relevance (benefits)
Retrieval cues and context

Consumers form beliefs about

Brand attributes (descriptive features that characterize a
product or service)
Brand benefits (personal value and meaning)

Strongest Association created by direct experience

Weakest Association created by ads

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND IMAGE
FAVORABILITY of Brand Association
Favorable associations
o Desirable (relevant, distinctive and believable)
o Successfully delivered

To choose favorable associations analyze competitors

and customers needs and wants

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND IMAGE
UNIQUENESS of Brand Associations
Unique Selling Proposition why should they buy it?
Uniqueness made explicit by
o Direct Comparisons with competitors or
o Implicitly through product and non-product related
attributes and benefits
Brand Associations should NOT ONLY be strong and
favorable BUT ALSO be Unique and NOT shared with
others.
B. Associations Context dependent

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CREATING A
POSITIVE BRAND IMAGE
Brand Associations
Does not matter which source of brand association
Need to be favorable, strong, and unique
Marketers should recognize the influence of these other
sources of information by both
o managing them as well as possible and by
o adequately accounting for them in designing communication
strategies.

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

THE FOUR STEPS OF BRAND BUILDING

1. Ensure identification of the brand with customers
and an association of the brand in customers minds
2. Establish the totality of brand meaning in the minds
of consumers
3. Elicit the proper customer responses to the brand
identification and brand meaning
4. Convert brand response to create an intense, active
loyalty relationship between customers and the
brand

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND RESONANCE MODEL

Views brand building as an ascending series of steps
Follows the steps (minds of customers)

Brand Building Blocks - a pyraamid of six brand

building blocks with customers

This model emphasizes the DUALITY of brands

The rational route
The emotional route

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

4. BRAND RESONANCE PYRAMID

Stages of Brand Branding Objective at
development each stage

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

1. SALIENCE DIMENSIONS
Brand Salience measures awareness
How often and how easily brand is evoked under various situations
Top-of-mind: Easily recalled and recognized
Pervasive/wide-spread

Depth of brand awareness

Ease of recognition and recall
Strength and clarity of category membership

Breadth of brand awareness

Range of usage and purchase situations in which brand elements
comes to mind

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

PRODUCT CATEGORY STRUCTURE

To fully understand Brand recall

How product categories are
organized in memory
Hierarchical fashion
Sufficient mind share is important

KEY Where, when & how easily customers think of it

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

2. CREATING BRAND MEANING

2-Major Categories of Brand Associations
1. Brand Performance how well product/service meets
functional needs
o Reliability, durability and serviceability
2. Brand Imagery psychological and social needs
o Who uses/user profiles/demographic factors
o Psychological factors attitudes towards life, careers, possessions,
social issues
o Under what conditions /situations, they buy (dominos, Pizza hut)
o Brands take on personality Traits modern, old fashioned, lively ,
exotic

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND PERSONALITY
5 dimensions
Sincerity, excitement, complexity, sophistication and
ruggedness
Formed by ads/Marketing programs
Usage situation shown in ads
Actors in the advertisements
User Imagery & B. Personality
NOT always in agreement - esp. when performance-related
attributes are important to decision making (e.g., food pdts)
BUT when image-related attributes are central to decision
making (e.g., cars, liquor, cigarettes, etc.)

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

3. BRAND RESPONSES
BRAND JUDGEMENTS (ARISE FROM HEAD)

4 major judgements
1. Brand quality 3. Brand consideration
Value Relevance
Satisfaction 4. Brand superiority
2. Brand credibility Differentiation
Expertise
Trustworthiness
Likeability

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

3. BRAND RESPONSES
BRAND FEELINGS (ARISE FROM HEART)

Emotional responses
Warmth
Fun
Excitement
Security
Social Approval
Self-respect

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

4. RESONANCE DIMENSIONS
Behavioral loyalty
Frequency and amount of repeat purchases
Attitudinal attachment (Overall evaluation of brand)
Love brand (favorite possessions; a little pleasure)
Proud of brand
Sense of community
Kinship
Affiliation
Active engagement
Seek information, WOM
Join club
Visit website, chat rooms

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CREATING CUSTOMER VALUE

Customer-brand relationships are the foundation of
brand resonance and building a strong brand.
The customer-based brand equity model certainly
puts that notion front and center.

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

CUSTOMER EQUITY
The sum of lifetime values of all customers
Customer lifetime value (CLV) is affected by
revenue and by the cost of customer acquisition,
retention, and cross-selling

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

RELATIONSHIP OF CUSTOMER EQUITY TO

BRAND EQUITY
Customers drive the success of brands but brands are
the necessary touchpoint that firms have to connect
with their customers.
Customer-based brand equity maintains that brands
create value by eliciting differential customer
response to marketing activities.
The higher price premiums and increased levels of
loyalty engendered by brands generate incremental
cash flows.

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

WHAT IS A BRAND PROMISE?

A brand promise is the marketers vision of what the

brand must be and do for consumers.

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

Source: Aaker, Managing Brand Equity, pg-17

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

AAKER MODEL BRAND IDENTITY

View Brand equity as
Brand awareness
Brand loyalty
Brand associations

The above combine to add or subtract VALUE provided by

product or service

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

AAKER MODEL
Brand management starts with
Brand identity - a unique set of associations
Stands for, promises, Image

Brand Identity-8to 12 brand elements which represent

product concept such as
Product scope, attributes, quality, value, etc

Core identity elements-drives the brand-building

programs
Extended Identity elements- add texture & guidence
Brand essence- communicate in a compact &
inspiring way

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

AWARENESS PYRAMID

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

THE VALUE OF BRAND AWARENESS

Source: Aaker, Managing Brand Equity, pg-63

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

THE LOYALTY PYRAMID

Source: Aaker, Managing Brand Equity, pg-40

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND LOYALTY
Creating and Maintaining Brand Loyalty The Value of Brand Loyalty

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

VALUE OF PERCEIVED QUALITY

Source: Aaker, Managing Brand Equity, pg-86

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

BRAND ASSOCIATIONS

Source: Aaker, Managing Brand Equity, pg-115

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ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

VALUE OF BRAND ASSOCIATIONS

Source: Aaker, Managing Brand Equity, pg-111

ESC RENNES SCHOOL OF BUSINESS Lecture-2: Brand Equity

END OF SESSION-2

THANKS FOR YOUR ATTENTION!!!

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