MARKETING COMMUNICATIONS

CHALLENGES: ENHANCING BRAND EQUITY,

INFLUENCEING BEHAVIOR, AND BEING
ACCOUNTABLE
Chapter Objectives
Explain the concept of brand equity from both the companys and the customers
perspectives.
Describe the positive outcomes that result from enhancing brand equity.
Appreciate a model of brand equity from the customers perspective.
Understand how marcom efforts must influence behavior and achieve financial
accountability.
Chapter Overview
The basic issues addressed in this chapter are these !hat can mar"eting communicators do to
enhance the equity of their brands and# beyond this# affect the behavior of their present and
prospective customers$ Also# how can mar"eting communicators %ustify their investments in
advertising# promotions# and other marcom elements and demonstrate financial accountability$
The concept of brand equity is explained from both the companys perspective and the
consumers perspective. The firm&based viewpoint of brand equity focuses on outcomes
extending from efforts to enhance a brands value to its various sta"eholders and discusses
various outcomes '() achieving a higher mar"et share# '*) increasing brand loyalty# '+) being
able to charge premium prices# and ',) earning a revenue premium. -rom the perspective of the
customer# a brand possesses equity to the extent that they are familiar with the brand and have
stored in their memory favorable# strong# and unique brand associations. .rand equity from the
customers perspective consists of two forms of brand&related "nowledge '() brand awareness
and '*) brand image. The chapter covers three ways by which brand equity is enhanced and
labels these the '() spea"&for&itself approach# '*) message&driven approach# and '+) leveraging
approach. The chapter then discusses ten traits shared by the worlds strongest brands.
The latter portion of the chapter covers the concept of /012# or return on mar"eting
investments. 3everal difficulties of measuring marcom effectiveness are discussed '() choosing
a metric# '*) gaining agreement# '+) collecting accurate data# and ',) calibrating specific effects.
The chapter then discusses mar"eting&mix modeling 'i.e.# multivariate regression analysis) and
how it can assist managers in determining the effect of each marcom element on sales volume.
When Polls Fail to Reveal the Complete Picture
Marketing researchers and pollsters are constantly surveying people about their likes and dislikes, their
voting intentions, their thoughts about which actors should win cademy wards, and on and on! Pollsters
also investigate consumers" thoughts and #eelings toward brands! $n a recent online poll %,&'' adults were
asked to spontaneously identi#y up to three brands that they personally regarded as the (best!) Coca*Cola,
Chapter 2
+ony, ,oyota, -ell, Ford, .ra#t Foods, Pepsi*Co, Microso#t, pple, and /onda were identi#ied as the 0' (best)
brands! Critics suggest that such polls are not true indicators o# the e1uity o# a brand, as Ford Motors is
anything but one o# the world"s best brands in terms o# pro#itability, market share, sales growth, and
consumer con#idence! (2est brands) surveys are more a measure o# brand awareness than o# brand e1uity!
MKTG 6220
IMC
Summer 2014
Focus: Chapter 2: Marcoms Challenges: Enhancing Brand Equity, Infuencing Behavior, and
Being Accountable
Brand Equity
Defnition: This is the diferential efect that, knowing the brand name has, on customer response to
the product and its marketing. It is a measure of the brands ability to capture customer preference
and loyalty (Armstrong & Kotler). Brand equity can be considered either from the perspective of
the organization that owns it or from the vantage point of the customer.
From organizations perspective:
1. A higher market share is achieved
2. Brand loyalty increases
3. Premium prices can be charged: As brand equity increases, the brand is able to charge higher
prices.
4. The brand earns a revenue premium (The revenue diferential between a branded item and a
corresponding private labeled item; e.g., the diference in revenue earned by the brand being Dole
versus Kroger).
From the consumers perspective (begins with brand knowledge, which involves awareness and image)
Brand awareness: An issue of whether a brand name comes to mind when consumers think about a
particular product category and the ease with which the name is evoked.
Brand awareness involves brand recognition (if you were shown the logo or packaging, or given the
name on a list, you would know what kind of product it is and something about it) and brand recall
(you could come up with the name if someone asked you to list or name all the brands in a particular
product category). Brand recall can be either aided or unaided.
Aided recall: E.g. Here is a list of brands. Which of them is a toothpaste? This method generates
more recall.
Unaided recall: List all brands of toothpaste tht u know abt. No clues given. Generate on their own.
Brand Image (can be favorable or unfavorable)
The types of associations that come to the consumers mind when contemplating (observe carefully)
a particular brand.
Consumers also associate certain things with brands (Brand associations): brands have certain
attributes; they provide certain benefts; and we have certain attitudes, positive or negative, towards
them.
In terms of image, we can have favorable or unfavorable impressions, which can be weak or strong in
their intensity, and they can relate only to one brand (unique) or to other brands in the category); e.g.
you think highly of Nike shoes and you think they are the only ones that guarantee comfort and
fashion.
Benefts that a brand provides (MCQ)
-Functional: It quenches my thirst; it covers my feet.
-Symbolic: it helps me to make a statement about who I am (I am stylish/fashionable; I have good
taste; I am an innovator).
-Experiential: it allows me to have certain experiences, which may be pleasant/fun/novel, etc.
Brand Awareness Pyramid:
Review this model that describes how brand awareness works. A brand starts out being unknown
(consumers are unaware of the brand); then, through various IMC eforts, the consumers come to be
able to recognize the brand; a higher level of awareness is brand recall (where the consumer can
come up with the name without prompts) and ultimately, the brand becomes Top of Mind, meaning
whenever the product category is activated, the brand that comes frst to mind is this brand.
Aim of marcom is to move consumers from a state of unawareness of my brand to top of mind
awareness.
Disadvantages of this model: (Criticism)
Just bcoz, the brand is in the TOMA, it doesnt mean tht the consumers will purchase it or even
capable of even purchasing it and it may also not be only due to a positive efects caused by the
brand. It may also be due to -ve impacts caused by the brand to the consumers.
Note that brands also have personalities; dimensions of brand personality: Sincerity; Excitement;
Competence; Sophistication; and Ruggedness (toughness).
Ways Brand Equity Is Enhanced:
1. Speak for itself: overtime, for example, the brand has lived up to our expectations. No need anyone
to talk abt it.
2. Message-driven: based on IMC eforts. Based on the ads, u can enhance it. Undermining the brand
may be a caution to be considered by luxury brands in this.
3. Leveraging: by association; for example, if the brand is an Olympic sponsor, that says something
about the brand. Note the current concern about BP (British Petroleum) as an Olympic sponsor.
Leveraging can also come from country of origin(eg. wine coming from France is supposed to be
gud), celebrity endorsers, third-party endorsements, or alliances with other brands/companies.
-i. Leveraging associations from other brands (What is the diference between co-branding and
ingredient branding? What are some examples of each?)
-ii. Leveraging associations from people: Bill Gates-Microsoft, Steve Jobs-Apple, Vasanth & Co. ,
Celebrities can also be used here.
-iii. Leveraging associations from things
iv. Leveraging associations from places.
Benefts of enhancing brand equity: (organizational point of view)
-Increased consumer loyalty
-Long-term growth and proftability for the brand
-Brand diferentiation from competitive oferings
-Insulation of brand from price competition
Global brands: What makes a brand a global brand? What are some characteristics of global brands?
What are some examples of global brands?
Measurement:
-What to measure: (a) change in brand awareness; (b) changes in attitudes toward the brand; (c)
increased purchase intentions; and (d) sales volume.
-Return on investments (spending on the various IMC tools is seen as an investment for which there
should be some return)
-Marketing mix modeling: models based on the contributions of various IMC tools and tactics on
some variable such as fnal sales
-Difculties in measurement, including agreement on what to be measured, the appropriate metrics
to be used, precise data, and dissecting the contribution of each IMC tool and tactic.