CustomerCustomer-Based Brand Equity

-Namrata Jajoo

CBBE
 The

power of a brand lies in what customers have learnt, felt, seen and heard about the brand as a result of their experiences over time.  THE POWER OF THE BRAND LIES IN WHAT RESIDES IN THE MINDS OF THE CUSTOMERS.

CBBE
 Consumer s

perceptions of the performance of a product are highly dependent on their impressions of the brand that goes with it; Clothes may seem to fit better Cars may seem to drive more smoothly Wait in a bank line may seem shorter

CBBE Defined
 CBBE

is the differential effect that brand knowledge has on customer response to the marketing of that brand.  CBBE may be positive or negative.

Brand equity as a bridge

 Brand

equity provides marketers with a vital strategic bridge from their past to their future. Brands as reflection of the past Quality of the investment in brand building is more critical than the quantity. Brands as direction of the future True value and future prospects of a brand rest with the consumer

Criticism
 In

her book No Logo: Taking aim at the brand bullies , Naomi Klein observes that as companies seek to reduce costs, they often divest their manufacturing operations and outsource production.  Co. s thus shifting from a production model to a marketing model are basically producing brands and nothing else.

Customer equity
 Blattberg

and Deighton define customer equity in terms of the optimal balance between what is spent on customer acquisition versus what is spent on customer retention.  It is the total asset value of the relationships which an organization has with its customers.

Sources of Brand Equity

 For

Brand Equity to be created, consumers must be convinced that there are meaningful differences among brands in the product or service category.

Brand Knowledge
 The

associative network model views memory as consisting of a network of nodes and connecting links, in which nodes represent stored information or concepts and links represent the strength of association between this information or concepts.

Brand Knowledge
 Brand

knowledge is conceptualised as consisting of a brand node in memory with a variety of associations linked to it.  It has 2 components; - Brand Awareness - Brand Image

Brand Awareness
 Brand

Awareness is related to the strength of the brand node, as reflected by consumer s ability to identify the brand under different conditions.

Brand Awareness
 Brand
-

Awareness consists of: Brand recognition (when given the brand as cue) Brand recall (when given the product category, needs fulfilled by the category, or a purchase or usage situation)

Consequences of Brand Awareness

 Learning

Advantages (establishing of brand node in memory)  Consideration Advantages (Brand will be member of consumer s consideration set)  Choice Advantages (In low involvement situations lack of purchase motivation or purchase ability. Elaboration-Likelihood Elaborationmodel)

Petty and Cacioppo s Elaboration Likelihood Model



- Central route to persuasion

Peripheral route to persuasion If she uses it, it must be really good!

Establishing Brand Awareness

 Through

repeated exposure (increases brand recognition)  Linkage in memory to appropriate product categories / situational purchase / consumption cues (increases brand recall)

Brand Image
 Brand

Image can be defined as perceptions about a brand as reflected by some - strong, - favourable and - Unique brand associations held in consumer memory.

Strength of brand associations

 Consumer

reasons for brand choice

100 80 60 40 20 0 environ perf. rating in advertised cons reports quality price past exp

Favourability of brand associations

 Which

associations are desirable to the consumer? (how relevant, distinctive and believable)  Which associations are successfully delivered by the product? (feasibility, communicability & sustainability)

Uniqueness of brand associations

 USP s

based on product-related and nonproductnonproduct related attributes or benefits.  Stated explicitly by making direct comparison with competitor or implicitly without a point of competitive reference.  Shared associations can help to establish category membership and scope of competition.  Points of parity v/s points of difference.

Uniqueness of brand associations

A

specific brand may be an exemplar or most representative of the product or service category.  Just as the brand is linked to the product category, some category associations may also be linked to the brand.  An association may be valued in one situation but not another.

Brand building blocks

 There

are sequentially established 6 brand building blocks with customers, assembled in terms of a CBBE Brand Pyramid.
RELATIONSHIPS Resonance
Judgements

Feelings

RESPONSE

MEANING Performance Salience Imagery IDENTITY

Brand Salience
 Breadth

and depth of awareness  Product category structure (Product hierarchy product class-product classcategorycategory-product type-brand information) typeinformation)  Strategic implications (where, when, how easily and often do consumers think of brand)

Brand Meaning
 Brand

Performance (meeting of utilitarian, aesthetic and economic needs )  Brand Imagery (meeting of psychological and social needs)

Brand Performance

1. 2. 3. 4. 5.

5 imp types of attributes and benefits underlying Brand Performance: Primary ingredients and supplementary features Product reliability, durability, and serviceability Service effectiveness, efficiency, and empathy Style and design Price

Brand Imagery

1. 2. 3. 4.

Four categories of intangibles that can be linked to a brand: User profiles Purchase and usage situations Personality and values History, heritage and experiences

BRAND IMAGERY
-

User Profiles Type of person or organisation who uses the brand Associations may be based on (a) descriptive demographics like age, gender, race, income (b) Psychographic factors like attitudes towards life, careers, possessions, social issues, or political institutions.

BRAND IMAGERY

-

Purchase situations Under what conditions or situations the brand could be bought or used. Considerations could be (a) Type of channel (b) ease of purchase (c) associated rewards

BRAND IMAGERY

-

Usage situations Usage situation may be based on: (a) particular time of the day, week, month or year to use the brand. (b) location to use the brand (c) type of activity where the brand is used

BRAND IMAGERY
-

History, heritage, and experiences Associations from the past and certain noteworthy events in the brand history May involve distinct personal experiences and episodes or be related to past experiences of friends, family members etc. Associations to aspects of the marketing program of the brand. For eg: co. or person who makes the product, type of store where it is sold etc.

Brand Judgements
4
-

types of brand judgements: Quality (perceptions of quality and value) Credibility (perceived expertise, trustworthiness and likability) Consideration (deemed relevant and closely embraced) Superiority (unique brand associations)

Brand feelings
or negative emotional responses and reactions with respect to the brand.  Transformational advertising  Types of feelings: -experiential and immediate (warmth, fun, excitement) -private and enduring (security, social approval, self-respect) self Positive

Brand Resonance
or the depth of the psychological bond that customers have with the brand, as well as the level of activity engendered by this loyalty.  Four categories: - Behavioural attitude (how much and how often) - Attitudinal attachment (pleasure, favourite) - Sense of community (kinship or affiliation with fellow brand users) - Active engagement (customers become brand evangelists and ambassadors)
 Intensity

Brand building implications

 Customers

own brands  Don t take short-cuts with brands short Brands have a duality (appeal to head and heart)  Brands should have a richness (depth)

Marketing Advantages of strong brands

Creating Financial value for strong brands (Ian Lewis from Time-Life) Time- Factors related to growth (new customers, resist competitive activity, introduce line extensions, cross international borders) - Factors related to profitability (brand loyalty, premium pricing, lower price elasticity, lower advtg/sales ratio, Trade leverage)
 Factors

Marketing Advantages of strong brands

 Less

vulnerability to competitive marketing actions and crises. - J&J s Tylenol crisis  Increased marketing communication effectiveness  Larger margins  Greater trade cooperation and support

BRAND IDENTITY
 In

order to become or stay strong, brands must be true to their identity.  Communication managers are now ready to look beyond the surface of the brand for the brand s innermost surface, because a brand: - needs to be Durable - should send out coherent signs - Must be realistic

BRAND IDENTITY v/s BRAND IMAGERY

- Notion of Brand Image is both volatile and changing and it focuses too much on brand appearance. - Brand identity on the other hand is the essence of the brand.

THE IDENTITY PRISM

Picture of sender Physique
E X T E R N A LI S A TI O N

Personality
I N T E R N A LI S A TI O N

Relationship

Culture

Reflection Picture of recipient

Self-image

BRAND IDENTITY PRISM

 Physique
-

The first step in defining a brand is to define its physical aspect: What is it? What does it do? What does it look like?

BRAND IDENTITY PRISM

 Physique
-

The first step in defining a brand is to define its physical aspect: What is it? What does it do? What does it look like?

BRAND IDENTITY PRISM

 Personality

- Personality has been the main focus of advertising since 1970. - The way a brand speaks of its products or services shows what kind of person it would be if it were human. Thus the brand has a personality and slowly builds character.

BRAND IDENTITY PRISM

 Personality
-

The idea of having a famous character represent the brand has become widespread. Easiest way of creating instant personality is to give the brand a spokesperson or a figurehead, whether real or symbolic.

BRAND IDENTITY PRISM

 Culture

Culture means the set of values feeding the brand s inspiration. - Cultural facet refers to the basic principles governing the brand in its outward signs ( products and communication) - eg: Coca-Cola, Mercedes, MGM, Rajasthan Cocabank, saraswat bank
-

BRAND IDENTITY PRISM

 Relationship
-

Brands are often at the crux of transactions and exchanges between people. Particularly crucial for banks, banking brands, services, retail .

BRAND IDENTITY PRISM

 Reflection

- Because its communication and its most striking products build up over time, a brand will always tend to build a reflection or an image of the buyer or user which it seems to be addressing.

BRAND IDENTITY PRISM

 Reflection
-

v/s Target The Target describes the Brand s potential purchasers or users. The customer should be reflected as he/she wishes to be seen as a result of using the brand. For instance, in the apparel industry the obsession to look younger should concern the brand s reflection , not necessarily their target.

BRAND IDENTITY PRISM

 Self-image Self-

If reflection is the Target s outward image, selfself-image is the Target s own internal mirror. Through our attitudes towards certain brands, we develop a certain type of inner relationship with ourselves.

BRAND IDENTITY PRISM

 The

prism concept derive from the fact that Brands Have the gift of speech .  They grow obsolete if they remain silent or unused for too long.  All the facets of the prism are interrelated and form a well-structured entity. well-

BRAND IDENTITY PRISM

 The

facets to the left Physique, relationship and reflection are the social facets (outward expression)  Facets to the right Personality, culture and self-image are those incorporated selfwithin the spirit of the brand itself.