Managing Brand Equity

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Brand equity is

a set of brand assets and liabilities linked to a brand

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Elements of Brand Equity:

Brand Loyalty Brand Awareness Perceived Quality Brand Associations
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Brand Loyalty
Brand loyalty is a measure of the attachment that a customer has to a brand.
It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features.

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Brand Loyalty Pyramid

Committed Buyer
Likes the Brand - Considers it a Friend Satisfied Buyer With Switching Costs Habitual Buyer - No Reason to Change Switchers / Price Sensitive

Indifferent No Brand Loyalty

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Measuring Brand Loyalty

Purchase Behavior Patterns Switching Cost Analysis Satisfaction Measurement
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Strategic Value of Brand Loyalty

Reduce marketing cost Trade (channel distribution) leverage Attracting new customers

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Enhancing Brand Loyalty

Treat the customer right Stay close to the customer Measure/manage customer satisfaction Create switching cost Provide extras

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Brand Awareness is
the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category

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Brand Awareness Hierarchy

Top of Mind Brand Recall Brand Recognition Unaware of Brand

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Value of Brand Awareness

Anchor to which other associations can be attached Familiarity and liking Signal of substance/commitment Brand to be considered
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How to Achieve Brand Awareness

Be different, memorable Involve a slogan or jingle Symbol exposure Publicity

Event sponsorship
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Perceived Quality
The customer's perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to

alternatives. Perceived quality is a perception

by customers.

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What Influences Perceived Quality of Product?

Performance Features

Conformance with specifications

Reliability Durability Serviceability

Fit and finish

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Appearance Reliability

Competence
Responsiveness

Empathy
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What Influences Perceived Quality of Service?

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The Value of Perceived Quality

Reason-to-Buy Differentiate/Position A Price Premium Channel Member Interest Brand Extensions
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Brand Association
A brand association is anything "linked" in memory to a brand.
Thus, McDonald's could be linked to a character such as Ronald McDonald, a consumer segment such as kids, a feeling such as having fun, a product characteristic such as service, or a symbol such as the Golden Arches.
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Some Types of Associations

Product Attributes Customer Benefits Relative Price Lifestyle/Personality Celebrity/Person Use/Application
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The Value of Brand Associations

Help Process/Retrieve Information Differentiate/Position Reason-to-Buy Create Positive Attitudes/Feelings Basis for Extensions

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Maintaining Associations
Be consistent over time
Be consistent over elements of the marketing program Manage disasters in order to minimize their damage
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Criteria for Brand Name Selection

Be easy to learn and remember Suggest the product class Support a symbol or slogan

Suggest desired association without being boring or trivial

Not suggest undesired associations Be distinctive Be available and protectable legally
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Source of Reference: David Aaker, Managing Brand Equity : Capitalizing on the Value of A Brand Name, Free Press

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