BRAND EQUITY &

CUSTOMER-BASED BRAND EQUITY

10
Creating Brand Equity

What Is Brand Equity?

Brand equity 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

Brand Equity
Brand equity relates to the fact that different
outcomes result in the marketing of a product or
service because of its brand name, as compared
to if the same product or service did not have
that name.

Brand Equity as a Bridge

Reflection of past investments in the
marketing of a brand
Direction for future marketing actions or
programs

Making a Brand Strong:

Brand Knowledge
Brand knowledge:
is the key to creating brand equity
consists of a brand node (stored
info/concept) in memory with a variety of
associations linked to it.
has two components: brand awareness and
brand image

Sources of Brand Equity

Brand awareness (customers ability to identify
the Brand under different conditions)
Brand recognition
Brand recall

(WHY IMP???)

Brand image (customers perceptions about the

Brand reflected by Brand associations)
Strong, favorable, and unique brand associations

Establishing Brand awareness

1. Increasing the familiarity of the brand through
repeated exposures (for Brand recognition) and,
2. Forging strong associations with the
appropriate product category or other relevant
purchase/consuption clues (for Brand recall)

Dimensions of Brand Equity

Perceived Quality
Brand Loyalty
Brand Awareness
Brand Association

Perceived Quality
Contributes to profitability by enhancing
prices and market share
Improved perceived Quality=Improved ROI

Brand Loyalty
The strength of the consumers preference for a brand
corresponding to his readiness or otherwise for using a
competing brand
Core strength of the brand and,
A major bearing variable in determination of brand equity

Brand Loyalty
Levels of Brand Loyalty1. Switchers - Price Spotters, Variety Seekers, Indifferents
2. Satisfied/Habitual buyer , no reason to change
3. Satisfied buyer with switching costs
4. Likes the Brand, considers it his friend
5. Committed Buyers
Source: David Aaker (The Loyalty Pyramid)

Brand Awareness
Without Awareness, Where is the Brand ?

Top of the Mind Recall

Unaided Recall
Aided Recall
Faint Recall
Unaware of the Brand

Brand association
Anything which is deep seated in customers mind
about the brand
Are the attributes of brand which come into
consumers mind when the brand is talked about
Related with both implicit and explicit meanings
which a consumer relates/associates with a
specific brand name.

Basis for forming Brand associations

Customers contact with the organization and its employees;
Advertisements;
Word of mouth publicity;
Price at which the brand is sold;
Celebrity/big entity association;
Quality of the product;
Products and schemes offered by competitors;
Product class/category to which the brand belongs;
POP ( Point of purchase) displays; etc

Why Brand Associations?

Help Process / Retrieve Information

Differentiate / Position
Reason to Buy
Create Positive Attitudes / Feelings
Basis for Extensions

Types of Associations

Product Attributes
Intangibles
Customer Benefits
Relative Price
Use / Application
User Customer
Celebrity / Person
Life Style / Personality
Product Class
Competitors
Country / Geographic Area

Brand Name & Symbol

Advantages of Brand awareness

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

Creating a Positive Brand Image

Brand Associations
Need to be favorable, strong, and unique
Marketers should recognize the influence of these
other sources of information by both managing them
as well as possible and by adequately accounting for
them in designing communication strategies.

Customer-Based Brand Equity

The differential effect that brand knowledge
has on consumer response to the marketing of
that brand.
Keller, 1993

Customer-Based Brand Equity

Differential effect
Differences in consumer response

Brand knowledge
A result of consumers knowledge about the brand

Consumer response to marketing

Choice of a brand
Recall of copy points from an ad
Response to a sales promotion
Evaluations of a proposed brand extension

Customer-Based Brand Equity

Model
INTENSE,ACTIVE
INTENSE,ACTIVE
LOYALTY
LOYALTY

Consumer
Brand
Resonance

Consumer
Judgments

Brand
Performance

Consumer
Feelings

Brand
Imagery

BrandSalience

RATIONAL&
RATIONAL&
EMOTIONAL
EMOTIONAL
REACTIONS
REACTIONS
POINTSOF
POINTSOF
PARITY&
PARITY&
POINTSOF
POINTSOF
DIFFERENCE
DIFFERENCE
DEEP,BROAD
DEEP,BROAD
BRAND
BRAND
AWARENESS
AWARENESS

J-1
J-1

P-1
P-1

Application:
Key Drivers of Brand Equity

J-4
J-4

P-10
P-10

J-7
J-7

P-7
P-7

0.49

R-10
R-10

0.66
F-1
F-1

I-1
I-1

0.17

0.58

Imagery
Imagery

Feelings
Feelings

I-7
I-7

F-7
F-7

0.24

F-4
F-4

R-1
R-1

Judgment
Judgment

0.65

Resonance
Resonance
R-7
R-7

Performance
Performance

R-4
R-4

I-10
I-10

Brand Salience
Measures awareness of the brand
Both Breadth and Depth of awareness
Depth: how easy is recall of brand
Breadth: range of purchase and use situations

Brand Performance
How well the brand meets customers functional
needs
Attributes and benefits indicating performance
1.
2.
3.
4.
5.

Primary ingredients and supplementary features

Product reliability, durability and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price

1. Performance Dimensions
Primary characteristics and supplementary
features
Product reliability, durability, and serviceability
Service effectiveness, efficiency, and empathy
Style and design
Price

Brand Imagery
Refers to more intangible aspects of the brand
Consumers can form imagery associations on
the basis of first hand experience of various
other sources
Key intangible associations:
User profile
Purchase and usage situation
Personality and values
History, heritage, and experience

2. Imagery Dimensions
User profiles
Demographic and psychographic characteristics
Actual or aspirational
Group perceptionspopularity

Purchase and usage situations

Type of channel, specific stores, ease of purchase
Time (day, week, month, year, etc.), location, and context of usage

Personality and values

Sincerity, excitement, competence, sophistication, and ruggedness

History, heritage, and experiences

Nostalgia
Memories

Brand Judgment
Customers personal opinion about and
evaluations of the brand- on the basis of
performance and imagery associations
Key criteria for judgment:
1.
2.
3.
4.

Brand Quality
Brand Credibility
Brand consideration, and
Brand Superiority

3. Judgment Dimensions
Brand quality
Value
Satisfaction

Brand credibility
Expertise
Trustworthiness
Likeability

Brand consideration
Relevance

Brand superiority
Differentiation

Brand Feelings
Customers emotional responses and reactions
to the brand
Six key brand building feelings:
Warmth
Fun
Excitement
Security
Social Approval
Self respect

4. Feelings Dimensions

Warmth
Fun
Excitement
Security
Social Approval
Self-respect

Brand Resonance
Describes the nature of relationship with customers
and extend to which customers feel they are in
sync with the brand
Dimensions:
1. Depth of psychological bond
2. Level of activity due to loyalty

This can be divided into four Categories

1.
2.
3.
4.

Behavioral loyalty
Attitudinal attachment
Sense of community
Active engagement

5. Resonance Dimensions
Behavioral loyalty
Frequency and amount of repeat purchases

Attitudinal attachment
Love brand (favorite possessions; a little pleasure)
Proud of brand

Sense of community
Kinship
Affiliation

Active engagement
Seek information
Join club
Visit website, chat rooms