Test #1 Study Guide
What is Customer Based Brand Equity and what steps can marketers take to strengthen brand equity? What are the three essential ingredients to brand equity?
- Approaches brand equity from the perspective of the consumer - Stresses that the power of a brand lies in what resides in the minds and hearts of customers •The three key ingredients of CBBE: 1.Differential effect 2.Brand knowledge 3.Consumer response to marketing Steps: Improved perceptions of product performance, greater loyalty, less vulnerability to competitive marketing actions, less vulnerability to marketing crisis, larger margins
Be able to name at least 4 different types of secondary associations a brand can leverage (country of origin, ingredients, celebrities, sponsorships, third party endorsements, etc)
- Country of Origin: Can be linked to the brand to generate secondary associations. Consumers choose brands originating in different countries based on: their beliefs about the quality of certain types of products from certain countries (Ex. Korean Skincare ) - Ingredient Branding: Creates brand equity for materials, components, or parts that are contained within other branded products. Branded ingredients are often a signal of quality (Ex.Onstar) - Celebrities: using well-known and admired people to promote products. A famous person can draw attention a brand. ( Pepsi commericals with Cardi, Beyonce, Cindy Crawford, Brittany) Third-Party Soures: Marketers can create secondary associations in a number of different ways ( by linking the brand to various third-party sources). Marketers often feature them in advertising campaigns and selling effort (Good Housekeeping)
Know the guidelines and principles for leveraging a secondary association
- Leveraging secondary brand associations may allow marketers to - Create or reinforce an important point of difference OR - Create or reinforce a necessary or competitive point of parity versus competitions -Commonality leveraging strategy - Make sense when consumers have associations to another entity that are congruent with the brand -Complementarity branding strategy - Make sense when entities represent a departure for the brand because there are few if any comon or similar associations
Be able to discuss what goes into executing a thorough brand inventory
-Purpose of the brand inventory is to provide a current, comprehensive profile of how all products and services are marketed and branded -Profiling each product or service requires marketers to catalogue: - Visual and written form for each product or service sold - The inherent product attributes or characteristics of the brand - Pricing, communications, and distribution policies The outcome of the brand inventory—both online and offline—should be an accurate, comprehensive, and up-to-date profile of how all the products and services are branded in terms of which brand elements are employed and how, and the nature of the supporting marketing program. Marketers should also profile competitive brands in as much detail as possible to determine points-of-parity and points-of-difference.
Be able to explain at least three of the 4 primary segmentation bases (geographic, behavioral, demographic, psychographic
1. Behavioral User status Usage Rate Usage occasion Brand loyalty Benefits sought 2. Demographic Income Age Sex Race Family 3. Psychographic Values Opinions Attitudes Activities Lifestyle 4. Geographic
Understand the concepts and be able to compare/contrast the three comparative methods marketers use to assess the benefits of brand associations (brand based comparison, marketing based comparison, conjoint analysis (be sure to study this from the slides and the textbook)
1. Brand-Based Comparative Approaches Applications •Consumption research for new or existing products. •Useful to determine brand equity benefits related to price margins and premiums. Competitive brands used as benchmarks by consumers 2. Marketing-Based Comparative Approaches Hold the brand fixed and examine consumer response based on changes in the marketing program. Dollar-metric measure of brand commitment Assessing consumer response to different advertising strategies Explore potential brand extensions by collecting consumer evaluations of a range of concept statements 3. Conjoint Analysis Application •Assess advertising effectiveness and brand value. •Explore how brand names interact with physical product features to affect the extendability of brand names to new product categories. •Determination of the company attributes relevant to customers. Survey-based multivariate technique that enables marketers to profile the consumer decision process with respect to products and brands Part Worth: The value consumers attach to each attribute level, as statistically derived by the conjoin formula
Be able to identify the 4 steps in strategic brand management and provide a brief explanation of each step.
1.Identifying and developing brand plans (mental maps, competitive frame of reference, points of parity and points of difference, core brand associations, brand mantra) 2.Designing and implementing brand marketing programs ( Choosing Brand elements, integrating the brand into marketing activities and supporting marketing program, and leveraging secondary association) 3.Measuring and interpreting brand performance (To manage brands profitably, managers must implement a brand equity measurement system. Measuring the brand equity measurements with brand audits, brand tracking studies, and brand equity management system) 4.Growing and sustaining brand equity (defining brand architecture, managing brand equity over time, managing brand equity over geographic boundaries, cultures, and market segments)
Be able to discuss what a brand is and how it differs from a product?
A product is anything we can offer to a market for attention, acquisition, use, or consumption: - Physical good like cereal, tennis racquet, or car A brand is more than a product since it can have dimensions that differentiate from other products. Brand can have more symbolic, emotional, and intangible (Ex. Chick-Fil-A is symbolic due to it being home of the chicken sandwhich. Emotional due to customer service and going above and beyond). A brand can be differentiated on the basis of packaging, services provided, customer advice, financing, delivery arrangment, and warehousing. A product is categorized into five levels: Core benefit level Basic/Generic product level Expected product level augmented product level potential product level
Be able to define brand positioning and explain why it is important to brand marketers.
Act of designing the company's offer and image so that is occupies a distinct and valued place in the target customers' minds Finding the proper "location" in the minds of consumers or market segment Allows consumers to think about a product or service in the "right" perspective Why is it important? 1. Identify their target customers 2. Analyze the type of competition they might face in the identified market base 3. Identify product features and associations that are different or similar to their competitors
Define relationship marketing and be able to identify and define the three types of relationship marketing (mass customization, one-to-one marketing, and permission marketing). o Be able to provide examples of each of these
Attempts to provide a more holistic, personalized brand experience to create stronger consumer ties.Benefits:•Acquiring new customers can cost five times as much as satisfying and retaining current customers.•The average company loses 10 percent of its customers each year.•A 5 percent reduction in the customer defection rate can increase profits by 25 to 85 percent, depending on the industry.•The customer profit rate tends to increase over the life of the retained customer.•3 concepts associated with relationship marketing: 1)Mass customization: Making products to fit the customer's exact specifications.•The advent of digital-age technology enables companies to offer customized products on a previously unheard-of scale. (NikeID, customized Coke bottles)•Can involve customers in the purchase process •Customers are now in a position to co-create their offerings with firms 2)One to one marketing: Consumers help add value for marketers by providing information to the marketerIn turn, marketers add value by taking that information 3)Permission marketing: The practice of marketing to consumers only after gaining their express permission.•An influential perspective on how companies can break through the clutter and build customer loyalty.•"permission" to speak with the customer, versus 'interrupting' with TV or radio or OOH•Example: Amazon, with customer permission, uses database software to track customer purchase habits and send them personalized marketing messages
brand exploratory
Brand exploratory - - research directed to understand what consumers think and feel about the brand and act toward it in order to better understand sources of brand equity as well as any possible barriers. •Steps for brand exploratory: •Study prior research •Interview internal personnel •Conduct additional research
Be able to name various brand elements and how marketers can effectively use them to enhance brand equity
Brand names- Captures the central theme or key associations of a product in a very compact and economical fashionMost difficult element for marketers to changeClosely tied to the product in the minds of consumers; Easily rememberedHighly suggestive of the product class and benefitsInherently fun or interestingRich with creative potentialTransferable to a wide variety of product and geographic URLs Logos and symbols- Easily recognized and can be a valuable way to identify productsVersatileAbstract logos offer advantages when the funk brand name is difficult to sue for any reasonUnlike brand names, logos can be easily adapted over time to achieve a more contemporary look; Reduce selling time and costImprove the company's image Characters- Tend to be attention getting and quite useful for creating brand awarenessHelps brands break through marketplace clutter as well as help communicate a key product benefitThe human element of brand characters can enhance like ability and help create perceptions of the brand as fun and interestingA consumer May more easily form a relationship with a brand literally has a human or other character presenceBrand characters do not typically have direct product meaning, therefore they can be transferred relatively easily product categories Slogans- Help build brand awareness by making strong links between the brand and the corresponding product categoryMay serve as tag lines to summarize the description or persuasive information conveyed in the ads Jingles- Musical messages written around the brandHave catchy hiiiks and choruses that became permanent registered in the minds of listeners. Enhance brand awareness by repeating the brand name in clevel and am using ways Packaging- Structural packaging innovations can create a point of difference that permits a higher margin. New packages can also expand a market and capture new market segments.•Packaging changes can have immediate impact on customer behavior and sales.
Be able to explain the roles that brands play for consumers and manufacturers.
Consumers Identification of source of product Assignment of responsibility to product maker Risk Reducer Search Cost reducer Promise, bond or pact with maker of product Symbolic device Signal of quality Manufacturers Means of identification to simplify handling or tracing Means of legally protecting unique features Signal of quality level to satisfied customers Means of endowing products with unique associations Source of competitive advantage Source of financial returns
Be able to identify factors that are challenges to brand building today and why they are challenges to brand building.
Downward pressure on prices - As search costs for information become lower, consumers can compare prices more easily: Thus, they can switch to a different brand more easily.....This may cause more commodification of products and services This creates challenges for brand marketers As digital and electronic connectivity becomes ubiquitous, consumers' attention is lessened and are more vulnerable to intrusions: Backlash may come as consumers become increasingly resistant to marketers attempts to gain access to them Technology has offered two phenomena related to branding: Social media platforms: While they offer a way for consumer to connect and communicate their preferences for goods or services, the platforms face increased scrutiny by regulatory agencies Peer-to-peer sharing: Napster, Airbnb, Zipcar The digital world allows easier entry into new markets: When Amazon Movies began offering streaming services, it faced competition from Netflix and Apple i Tunes Disintermediation: Reduction or elimination of intermediaries The travel industry, for example, has experienced significant decline in the need for travel agencies: Reintermediation: Introduction of new intermediaries that perform some of the same functions or have additional roles in the channel of distribution Yelp, online consumer guides (Consumer Reports.com), and influential bloggers A winner-take-all market is likely to permeate other industries and categories outside of sports and entertainment: Brands which are market leaders within categories are likely to be chosen at an even greater rate Customer centricity - Brand equity can be vulnerable to destruction if product and service claims are not verified by actual experience: Review forums....Reviews from peers.....Online word-of-mouth
Be able to explain the roles of brands in a portfolio - Flankers, Cash Cows, Low-End, Entry-Level, or High-End, Prestige Brands
Flankers- Protective or fighter brands, to create stronger points of parity with competitors' brands. Ex. Luv's Cash Cows- Despite dwindling sales, some brands are retained Ex. Netflix's DvDs Low-End, Entry-Level or High-End, Prestige Brands- The role of a relatively low-priced brand in the brand portfolio often may be to attract customers to the brand franchise. (ipad Nano) High price brand in the brand family is often to add prestige and credibility to the entire portfolio (iphone)
Explain the difference between a brand line extension and a brand category extension. Give an example of each. o What are the advantages and disadvantages of brand extensions? o Be able to explain several of the guidelines brand managers should follow when considering a brand extension
Line extension: New product introductions within existing categories (Lemon Oreos) Category extensions: New Product introductions outside exisiting categories (Oreo Candy Bars or Oreo Ice Cream) Launching a brand extension is harder than it might seem. Given that the vast majority of new products are extensions and the vast majority of new products fail, the clear implication is that too many brand extensions fail. An increasingly competitive marketplace will be even more unforgiving to poorly positioned and marketed extensions in the years to come. To increase the likelihood of success, marketers must be rigorous and disciplined in their analysis and development of brand extensions. Advantages: Improve brand image Reduce risk perceived by customers Increase the probability of gaining distribution and trial Disadvantage: Can confuse or frustrate consumers Can succeed but cannibalize sales of parent brand Can fail and hurt parent brand image
What is market segmentation? Discuss the 4 key criteria for effective segmentation.
Market segmentation divides the market into distinct groups of homogeneous consumers who have similar needs and consumer behavior. The 4 criteria includes: 1. Identifiability 2. Size 3. Accessibility 4. Responsiveness
Be able to explain Points of Parity and Points of Difference. Discuss how marketers utilize POP and PODs in Brand Positioning.
Points-of-difference (PODs): Attributes/benefits that consumers strongly associate with a brand positively evaluate, and believe they could not find to the same extent with a competitive brand. Desirable to consumer. - Consumers must see the brand association as personally relevant to them. (Desirable) Deliverable by the company - The company must have the internal resources and commitment to feasibly and profitably create and maintain the brand association in the minds of consumers. The product design and marketing offering must support the desired association. Differentiating from competitors. Finally, consumers must see the brand association as distinctive and superior to relevant competitors. Points- of -Parity Attribute/benefit associations that are not necessarily unique to the brand but may in fact be shared with other brands Category points-of-parity are attributes or benefits that consumers view as essential to a legitimate and credible offering within a certain product or service category. In other words, they represent necessary—but not sufficient— conditions for brand choice. Correlational points-of-parity are potentially negative associations that arise from the existence of positive associations for the brand. Competitive points-of-parity are associations designed to overcome perceived weaknesses of the brand in light of competitors' points-of-difference.
Be able to discuss brand tracking studies - what is tracked, how to conduct brand tracking studies, how to interpret, etc. o Be able to explain why key brand associations of Strength, Favorability and Uniqueness must be measured and measured in order
Tracking studies play an important role by providing consistent baseline information to facilitate day-to-day decision-making. What to Track - Product - brand tracking - Corporate or family brand tracking - Global Tracking How to conduct tracking studies - Whom to track - When and where to track How to Interpret - must determine appropriate benchmarks. "What is a sufficient level of brand awareness? "When are brand associations sufficiently strong, favorable and unique?" How positive should brand judgments and feelings be?" Also must identify the determinants or drivers of brand equity. Must know which brand associations actually influence consumer attitudes and behaviors. Both tangible and intangible drivers. 1)strength 1)Favorability 2)Uniqueness ...and must be done in order. Unless associations are strong enough for consumers to recall them, their favorability does not matter. And unless they are favorable enough to influence consumers' decisions, their uniqueness does not matter
Be able to discuss strategies and methodologies that are available to marketers to develop and set their pricing strategy.
Value Pricing - Objective is to uncover the right blend of product quality, product costs, and product prices. - Successful value-pricing strategy should strike a balance among - Product design and delivery - Product costs and product prices Price Segmentation •Sets and adjusts prices for appropriate market segments. •Starbucks has raised the prices of some of its specialty beverages while charging less for some basic drinks. Everyday low pricing •Has received increased attention as a means of determining price discounts and promotions over time. Reasons for price stability: Forward buying & Diverting
Be able to discuss the five levels of a product (Core, Basic, Expected, Augmented, Potential)
•Core benefit level: Fundamental need or want that consumers satisfy by consuming the product or service. •Basic/Generic product level: Basic version of the product containing only those attributes or characteristics absolutely necessary for its functioning but with no distinguishing features. •Expected product level: Set of attributes or characteristics that buyers normally expect and agree to when they purchase a product. •Augmented product level: Additional product attributes, benefits, or related services that distinguish the product from competitors. •Potential product level: All the augmentations and transformations that a product might ultimately undergo in the future.
