Ch.11 creating brand equity
11.2 A marketer's vision of what the brand must be and do for consumers is called ________.
brand promise
The ________ is a structured approach to assessing the sources and outcomes of brand equity and the way marketing activities create brand value.
brand value chain
The initial choices for the brand elements or identities making up the brand (brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packages, and signage) are referred to as ________.
brand equity drivers
11.2 Brand equity is the ________ endowed on products and services.
added value
11.6 Brand Extensions ** EXAM
Many firms have decided to leverage their most valuable asset by introducing a host of new products under their strongest brand names. Most new products are in fact brand extensions—typically 80 percent to 90 percent in any one year. Among the most successful in supermarkets in 2012 were Dunkin' Donuts coffee, Progresso Light soups, and Hormel Compleats microwave meals. ** EXAM ADVANTAGES OF BRAND EXTENSIONS Two main advantages of brand extensions are that they can facilitate new-product acceptance and provide positive feedback to the parent brand and company. Improved Odds of New-Product Success Consumers form expectations about a new product based on what they know about the parent brand and the extent to which they feel this information is relevant. By setting up positive expectations, extensions reduce risk. It also may be easier to convince retailers to stock and promote a brand extension because of anticipated increased customer demand. . An introductory campaign for an extension doesn't need to create awareness of both the brand and the new product; it can concentrate on the new product itself. Extensions can thus reduce launch costs, important given that establishing a major new brand name for a consumer packaged good in the U.S. marketplace can cost more than $100 million! Similar or identical packages and labels can lower production costs for extensions and, if coordinated properly, provide more prominence in the retail store via a "billboard" effect. With a portfolio of brand variants within a product category, consumers who want a change can switch to a different product type without having to leave the brand family. Positive Feedback Effects Besides facilitating acceptance of new products, brand extensions can provide feedback benefits. They can help to clarify the meaning of a brand and its core values or improve consumer loyalty to the company behind the extension A successful category extension may not only reinforce the parent brand and open up a new market but also facilitate even more new category extensions.97 The success of Apple's iPod and iTunes products was that they: (1) opened up a new market, (2) helped sales of core Mac products, and (3) paved the way for the launch of the iPhone and iPad products. ** EXAM DISADVANTAGES OF BRAND EXTENSIONS On the downside, line extensions may cause the brand name to be less strongly identified with any one product Brand dilution occurs when consumers no longer associate a brand with a specific or highly similar set of products and start thinking less of the brand. If a firm launches extensions consumers deem inappropriate, they may question the integrity of the brand or become confused or even frustrated: Which version of the product is the "right one" for them? Even if sales of a brand extension are high and meet targets, the revenue may be coming from consumers switching to the extension from existing parent-brand offerings—in effect cannibalizing the parent brand. Intrabrand shifts in sales may not necessarily be undesirable if they're a form of preemptive cannibalization ** EXAM -- SUCCESS CHARACTERISTICS Marketers must judge each potential brand extension by how effectively it leverages existing brand equity from the parent brand as well as how effectively, in turn, it contributes to the parent brand's equity. Does the parent brand have strong equity? Is there a strong basis of fit? Will the extension have the optimal points-of-parity and points-of-difference? How can marketing programs enhance extension equity? What implications will the extension have for parent brand equity and profitability? How should feedback effects best be managed?
11.6 Branding Decisions
** EXAM ALTERNATIVE BRANDING STRATEGIES Today, branding is such a strong force that hardly anything goes unbranded. Assuming a firm decides to brand its products or services, it must choose which brand names to use. Three general strategies are popular: Individual or separate family brand names. Consumer packaged-goods companies have a long tradition of branding different products by different names. General Mills largely uses individual brand names, such as Bisquick, Gold Medal flour, Nature Valley granola bars, Old El Paso Mexican foods, Progresso soup, Wheaties cereal, and Yoplait yogurt. -If a company produces quite different products, one blanket name is often not desirable. -ompanies often use different brand names for different quality lines within the same product class. A major advantage of separate family brand names is that if a product fails or appears to be of low quality, the company has not tied its reputation to it Corporate umbrella or company brand name. -Many firms, such as Heinz and GE, use their corporate brand as an umbrella brand across their entire range of products. - Development costs are lower with umbrella names because there's no need to research a name or spend heavily on advertising to create recognition. -Campbell Soup introduces new soups under its brand name with extreme simplicity and achieves instant recognition. Sales of the new product are likely to be strong if the manufacturer's name is good. Corporate-image associations of innovativeness, expertise, and trustworthiness have been shown to directly influence consumer evaluations.78 Finally, a corporate branding strategy can lead to greater intangible value for the firm Sub-brand name. Sub-brands combine two or more of the corporate brand, family brand, or individual product brand names. Kellogg employs a sub-brand or hybrid branding strategy by combining the corporate brand with individual product brands as with Kellogg's Rice Krispies, Kellogg's Raisin Bran, and Kellogg's Corn Flakes.
Like brand names, ________ can be an efficient "hook" to help consumers grasp why the brand is special.
. slogans
11.6 Brand Portofolio's
A brand can be stretched only so far, and all the segments the firm would like to target may not view the same brand equally favorably. Marketers often need multiple brands in order to pursue these multiple segments. Some other reasons for introducing multiple brands in a category include: Increasing shelf presence and retailer dependence in the store Attracting consumers seeking variety who may otherwise have switched to another brand Increasing internal competition within the firm Yielding economies of scale in advertising, sales, merchandising, and physical distribution ------------- ** EXAM -- The brand portfolio is the set of all brands and brand lines a particular firm offers for sale in a particular category or market segment. Building a good brand portfolio requires careful thinking and creative execution. ------- The hallmark of an optimal brand portfolio is the ability of each brand in it to maximize equity in combination with all the other brands in it. Marketers generally need to trade off market coverage with costs and profitability. If they can increase profits by dropping brands, a portfolio is too big; if they can increase profits by adding brands, it's not big enough. The basic principle in designing a brand portfolio is to maximize market coverage so no potential customers are being ignored, but minimize brand overlap so brands are not competing for customer approval. Each brand should be clearly differentiated and appealing to a sizable enough marketing segment to justify its marketing and production costs. Brand lines with poorly differentiated brands are likely to be characterized by much cannibalization and require pruning. There are scores of cereals, beverages, and snacks and thousands of mutual funds. Students can choose among hundreds of business schools. For the seller, this spells hypercompetition. For the buyer, as Chapter 13 points out, it may mean too much choice. ------------ FLANKERS Flanker or fighter brands are positioned with respect to competitors' brands so that more important (and more profitable) flagship brands can retain their desired positioning. CASH COWS Some brands may be kept around despite dwindling sales because they manage to maintain their profitability with virtually no marketing support. Companies can effectively milk these "cash cow" brands by capitalizing on their reservoir of brand equity. LOW-END ENTRY LEVEL The role of a relatively low-priced brand in the portfolio often may be to attract customers to the brand franchise. Retailers like to feature these "traffic builders" because they are able to trade up customers to a higher-priced brand. HIGH-END PRESTIGE The role of a relatively high-priced brand often is to add prestige and credibility to the entire portfolio. One analyst argued that the real value to Chevrolet of its high-performance Corvette sports car was "its ability to lure curious customers into showrooms and at the same time help improve the image of other Chevrolet cars.
11.2 Brand Promise
A brand promise is the marketer's vision of what the brand must be and do for consumers. Virgin's brand promise is to enter categories where customers' needs are not well met, do different things, and do things differently, all in a way that better meets those needs. Violating a brand promise can have severe consequences. Founded in 1984, TED talks ("Technology, Entertainment, and Design") became widely admired for their thought-provoking, leading-edge content. After deciding to let anyone apply to manage and stage local events called TEDx with relatively minor oversight, the organizers of TED saw thousands of events of varying quality spring up all over the world, leading some critics to question whether the organization was losing control of its brand.
11.6 Devising a Branding Strategy ** EXAM
A firm's branding strategy—often called its brand architecture—reflects the number and nature of both common and distinctive brand elements. Deciding how to brand new products is especially critical. A firm has three main choices: It can develop new brand elements for the new product. It can apply some of its existing brand elements. It can use a combination of new and existing brand elements. ------ ** EXAM When a firm uses an established brand to introduce a new product, the product is called a brand extension. When marketers combine a new brand with an existing brand, the brand extension can also be called a sub-brand, such as Hershey Kisses candy, Adobe Acrobat software, Toyota Camry automobiles, and American Express Blue cards. The existing brand that gives birth to a brand extension or sub-brand is the parent brand. If the parent brand is already associated with multiple products through brand extensions, it can also be called a master brand or family brand ---- ** EXAM -- Brand extensions fall into two general categories. In a line extension, the parent brand covers a new product within a product category it currently serves, such as with new flavors, forms, colors, ingredients, and package sizes. Dannon has introduced several types of Dannon yogurt line extensions through the years—Fruit on the Bottom, All Natural Flavors, Dan-o-nino, and Light & Fit. In a category extension, marketers use the parent brand to enter a different product category, such as Swiss Army watches. Honda has used its company name to cover such different products as automobiles, motorcycles, snowblowers, lawn mowers, marine engines, and snowmobiles. This allows the firm to advertise that it can fit "six Hondas in a two-car garage." --- A brand line consists of all products—original as well as line and category extensions—sold under a particular brand. A brand mix (or brand assortment) is the set of all brand lines that a particular seller makes. Many companies are introducing branded variants, which are specific brand lines supplied to specific retailers or distribution channels. A licensed product is one whose brand name has been licensed to other manufacturers that actually make the product. Corporations have seized on licensing to push their company names and images across a wide range of products—from bedding to shoes—making licensing a multibillion-dollar business. It is perhaps not surprising that in a high-involvement category such as automobiles, licensing is big business
11.7 The goal of customer relationship management should be ________.
A. higher customer equity
Reinforcing brands is most successful when combined with ________.
D. consistent marketing support
11.4 MEASURING BRAND EQUITY
An indirect approach assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures. ** EXAM A direct approach assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. The brand value chain is a structured approach to assessing the sources and outcomes of brand equity and the way marketing activities create brand value First, brand value creation begins when the firm targets actual or potential customers by investing in a marketing program to develop the brand, including marketing communications, trade or intermediary support, and product research, development, and design. Next, these customers' mind-sets will affect buying behavior and the way consumers respond to all subsequent marketing activity—pricing, channels, communications, and the product itself—and the resulting market share and profitability of the brand. Finally, the investment community will consider this market performance of the brand to assess shareholder value in general and the value of a brand in particular. ------------------------- its ability to be meaningful, different, and salient. These three brand qualities (MD&S) predispose someone to positive purchase behavior (choose the brand over others, pay more for it, stick with or try it in the future), which in turn generates financial benefits to the company (increased volume share, higher price premium, increased likelihood to grow value share in the future). Millward Brown asserts that this brand predisposition is measured by three brand equity metrics: power, premium and potential. People are predisposed to choose the brand over others. This will drive brand volume, so power predicts volume share based entirely on perceptions, absent of activation factors. People are predisposed to pay more for the brand. This will allow the brand to charge more, so premium predicts the price index your brand can command. Potential indicates the likelihood of value share growth for the brand in the next 12 months, based on people's predisposition to stick to the brand or try it in the future. ---------- A brand audit is a focused series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity. Marketers should conduct a brand audit when setting up marketing plans and when considering shifts in strategic direction. Conducting brand audits on a regular basis, such as annually, allows marketers to keep their fingers on the pulse of their brands so they can manage them more proactively and responsively. A good brand audit provides keen insights into consumers, brands, and the relationship between the two. Brand-tracking studies use the brand audit as input to collect quantitative data from consumers over time, providing consistent, baseline information about how brands and marketing programs are performing. Tracking studies help us understand where, how much, and in what ways brand value is being created to facilitate day-to-day decision making.
11.5 Brand Revitalization
Any new development in the marketing environment can affect a brand's fortunes. Nevertheless, a number of brands have managed to make impressive comebacks in recent years.68 After some hard times in the automotive market, Cadillac, Fiat, and Volkswagen have all turned their brand fortunes around to varying degrees. Often, the first thing to do in revitalizing a brand is understand what the sources of brand equity were to begin with. Are positive associations losing their strength or uniqueness? Have negative associations become linked to the brand? Then decide whether to retain the same positioning or create a new one and, if so, which new one Sometimes the actual marketing program is the source of the problem because it fails to deliver on the brand promise. Then a "back to basics" strategy may make sense. In other cases, however, the old positioning is just no longer viable and a reinvention strategy is necessary. Mountain Dew completely overhauled its brand image to become a soft-drink powerhouse. As its history reveals, it is often easier to revive a brand that is alive but has been more or less forgotten. There is obviously a continuum of revitalization strategies, with pure "back to basics" at one end, pure "reinvention" at the other, and many combinations in between. The challenge is often to change enough to attract some new customers, but not enough to alienate old customers. Regardless of the strategy, brand revitalization of almost any kind starts with the product
11.2 Brand Equity Models * EXAM
BRANDASSET® VALUATOR ** EXAM - Advertising agency Young and Rubicam (Y&R) developed a model of brand equity called the BrandAsset®Valuator (BAV). - Based on research with more than 800,000 consumers in 51 countries, BAV compares the brand equity of thousands of brands across hundreds of different categories. There are four key components—or pillars—of brand equity, according to BAV - Energized differentiation measures the degree to which a brand is seen as different from others as well as its pricing power. -Relevance measures the appropriateness and breadth of a brand's appeal. Energized differentiation and relevance combine to determine brand strength—a leading indicator that predicts future growth value. -Esteem measures perceptions of quality and loyalty, or how well the brand is regarded and respected. -Knowledge measures how aware and familiar consumers are with the brand and the depth of their experience. Esteem and knowledge together create brand stature, a "report card" of past performance and a lagging indicator of current operating value. The relationships among these dimensions—a brand's "pillar pattern"—reveal much about a brand's current and future status. Brand strength and brand stature combine to form the power grid, depicting stages in the cycle of brand development in successive quadrants Strong new brands show higher levels of energized differentiation and energy than relevance, whereas both esteem and knowledge are lower still. Leadership brandsshow high levels on all pillars, with strength greater than stature. As strength slips, they become mass market brands. Finally, declining brands show high knowledge—evidence of past performance—a lower level of esteem, and even lower relevance and energized differentiation. Formally, the BAV analysis identified three factors that help define energy and the marketplace momentum it creates: Vision—A clear direction and point of view on the world and how it can and should be changed. Invention—An intention for the product or service to change the way people think, feel, and behave. Dynamism—Excitement and affinity in the way the brand is presented. The authors offer 10 "post-consumer learnings": 1. We are moving from a credit to a debit society. 2. There are no longer consumers, only customers. 3. Industries are revealed as collections of individuals. 4. Generational divides are disappearing. 5. Human regulation is remaking the marketplace. 6. Generosity is now a business model. 7. Society is shifting from consumption to production. 8. We must think small to solve big. 9. We are seeking better vs. more. 10. America is an emerging market for value-led innovation. According to BAV analysis, consumers are concentrating their devotion and purchasing power on an increasingly smaller portfolio of special brands—brands with energized differentiation that keep evolving. These brands connect better with consumers—commanding greater usage loyalty and pricing power and creating greater shareholder value.
11.1 The role of brands
BRANDS' ROLE FOR CONSUMERS - A brand is a promise between the firm and the consumer. - It is a way to reduce risk, set consumers' expectations, they promise to reliably deliver a predictable positive experience and set of desirable benefits. -the key is that it fulfills or exceeds customer expectations in satisfying their needs and wants. - -Consumers may evaluate the identical product differently depending on how it is branded.5 They learn about brands through past experiences with the product and its marketing program, finding out which brands satisfy their needs and which do not. -hey can express who consumers are or who they would like to be. For some consumers, brands can even take on human-like characteristics. BRANDS' ROLE FOR FIRMS - Brands also perform valuable functions for firms - First, they simplify product handling by helping organize inventory and accounting records. A brand also offers the firm legal protection forunique features or aspects of the product. - The brand name can be protected through registered trademarks, manufacturing processes can be protected through patents, and packaging can be protected through copyrights and proprietary designs. - A credible brand signals a certain level of quality so satisfied buyers can easily choose the product again. Brand loyalty provides predictability and security of demand for the firm, and it creates barriers to entry that make it difficult for other firms to enter the market -In this sense, branding can be a powerful means to secure a competitive advantage.Sometimes marketers don't see the real importance of brand loyalty until they change a crucial element of the brand, as the classic tale of New Coke illustrates. - To firms, brands represent enormously valuable pieces of legal property that can influence consumer behavior, be bought and sold, and provide their owner the security of sustained future revenues.
11.2 Brand Equity Models ** EXAM
BRANDZ BrandDynamics employs a set of simple scores that summarize a brand's equity and are relatable directly to real world financial and business outcomes. BrandDynamics maintain that three different types of brand associations are crucial for building customer predisposition to buy a brand—meaningful, different, and salient brand associations. The success of a brand along those three dimensions, in turn, is reflected in three important outcome measures: Power: a prediction of the brand's volume share Premium: a brand's ability to command a price premium relative to the category average Potential: the probability that a brand will grow value share According to the model, how well a brand is activated in the marketplace and the competition that exists there will determine how strongly brand predisposition ultimately translates into sales. BRAND RESONANCE MODEL The brand resonance model also views brand building as an ascending series of steps, from bottom to top: (1) ensuring customers identify the brand and associate it with a specific product class or need; (2) firmly establishing the brand meaning in customers' minds by strategically linking a host of tangible and intangible brand associations; (3) eliciting the proper customer responses in terms of brand-related judgment and feelings; and (4) converting customers' brand responses to intense, active loyalty. Creating significant brand equity requires reaching the top of the brand pyramid, which occurs only if the right building blocks are put into place. ** EXAM - Brand salience is how often and how easily customers think of the brand under various purchase or consumption situations—the depth and breadth of brand awareness. - Brand performance is how well the product or service meets customers' functional needs. - Brand imagery describes the extrinsic properties of the product or service, including the ways in which the brand attempts to meet customers' psychological or social needs. - Brand judgments focus on customers' own personal opinions and evaluations. Brand feelings are customers' emotional responses and reactions with respect to the brand. Brand resonance describes the relationship customers have with the brand and the extent to which they feel they're "in sync" with it. Resonance is the intensity of customers' psychological bond with the brand and the level of activity it engenders.
11.1 Company Example Coke
Battered by a nationwide series of taste-test challenges from sweeter-tasting Pepsi-Cola, Coca-Cola decided in 1985 to replace its old formula with a sweeter variation, dubbed New Coke. But the launch of New Coke provoked a national uproar. Market researchers had measured the taste but failed to adequately measure the emotional attachment consumers had to Coca-Cola.
11.5 Managing Brand Equity ** EXAM
Because consumer responses to marketing activity depend on what they know and remember about a brand, as the brand value chain suggests, short-term marketing actions, by changing brand knowledge, necessarily increase or decrease the long-term success of future marketing actions. Brand Reinforcement - Brand leaders of 70 years ago that remain leaders today—companies such as Wrigley's, Coca-Cola, Heinz, and Campbell Soup—only do so by constantly striving to improve their products, services, and marketing. Marketers can reinforce brand equity by consistently conveying the brand's meaning in terms of (1) what products it represents, what core benefits it supplies, and what needs it satisfies; and (2) how the brand makes products superior and which strong, favorable, and unique brand associations should exist in consumers' minds. An important part of reinforcing brands is providing consistent marketing support. Consistency doesn't mean uniformity with no changes: While there is little need to deviate from a successful position, many tactical changes may be necessary to maintain the strategic thrust and direction of the brand. When change is necessary, marketers should vigorously preserve and defend sources of brand equity. At some point, failure to reinforce the brand will diminish brand awareness and weaken brand image. Consider what happened to Sears
________ is the strategy that reflects the number and nature of both common and distinctive brand elements. ** EXAM
Brand architecture
________ make(s) it easy for brand characters to break through marketplace clutter and communicate key product benefits in a soft-sell manner.
Brand characters that are colorful and rich in imagery
11.3 Choosing Brand Elements (Ways to build brand equity) ** EXAM
Brand elements are devices, which can be trademarked, that identify and differentiate the brand. Most strong brands employ multiple brand elements. Nike has the distinctive "swoosh" logo, the empowering "Just Do It" slogan, and the "Nike" name from the Greek winged goddess of victory. Marketers should choose brand elements to build as much brand equity as possible. The test is what consumers would think or feel about the product if the brand element were all they knew. Based on its name alone, for instance, a consumer might expect SnackWell's products to be healthful snack foods and Panasonic Toughbook laptop computers to be durable and reliable. ** EXAM** ----BRAND ELEMENT CHOICE CRITERIA There are six criteria for choosing brand elements. The first three—memorable, meaningful, and likable—are brand building. The latter three—transferable, adaptable, and protectable—are defensive and help leverage and preserve brand equity against challenges. 1.Memorable : How easily do consumers recall and recognize the brand element, and when—at both purchase and consumption? 2. Meaningful—Is the brand element credible? Does it suggest the corresponding category and a product ingredient or the type of person who might use the brand? 3.Likable—How aesthetically appealing is the brand element? A recent trend is for playful names that also offer a readily available URL, especially for online brands like Flickr, Instagram, Pinterest, Tumblr, Dropbox, and others. 4. Transferable—Can the brand element introduce new products in the same or different categories? Does it add to brand equity across geographic boundaries and market segments? 5.Adaptable—How adaptable and updatable is the brand element? Logos can easily be updated. The past 100 years have seen the Shell logo updated 10 times. 6.Protectable—How legally protectable is the brand element? How competitively protectable? When names are in danger of becoming synonymous with product categories—as happened to Kleenex, Kitty Litter, Jell-O, Scotch Tape, Xerox, and Fiberglass—their makers should retain their trademark rights and not allow the brand to become generic.
11.3 Developing Brand Elements (ways to build brand equity) ** EXAM
Brand elements can play a number of brand-building roles.39 If consumers don't examine much information in making product decisions, brand elements should be easy to recall and inherently descriptive and persuasive. The likability of brand elements can increase awareness and associations Brand characters have a long and important history in marketing. The Keebler elves reinforce home-style baking quality and a sense of magic and fun for their line of cookies. In the insurance industry, the AFLAC duck competes for consumer attention with GEICO's gecko, and Progressive's chatty Flo competes with Met Life's adorable Peanuts characters ** EXAM Brand characters represent a special type of brand symbol—one with human characteristics that in turn enhance likeability and tag the brand as interesting and fun. Consumers can more easily form relationships with a brand when it has a human or other character's presence. M&M's "spokescandies" are an integral part of all the brand's advertising, promotion, and digital communications. Some brand characters are animated, like the Pillsbury Doughboy, Peter Pan (from the peanut butter), and numerous cereal characters like Tony the Tiger and Snap, Crackle, & Pop. Because they are often colorful and rich in imagery, brand characters can help brands break through marketplace clutter and communicate a key product benefit in a soft-sell manner. The online popularity and effectiveness of brand characters was demonstrated by a research study revealing that the Pillsbury Doughboy garners 10 times the social media buzz for the Pillsbury brand as NBA star LeBron James does for his Nike sponsor! Often, the less concrete brand benefits are, the more important that brand elements capture intangible characteristics. Like brand names, slogans are an extremely efficient means to build brand equity.42 They can function as useful "hooks" to help consumers grasp what the brand is and what makes it special, as in "Like a Good Neighbor, State Farm Is There," "Nothing Runs Like a Deere," and "Every Kiss Begins with Kay" for the jeweler.
11.2 Defining Brand Equity ** EXAM
Brand equity is the added value endowed to products and services with consumers. It may be reflected in the way consumers think, feel, and act with respect to the brand, as well as in the prices, market share, and profitability it commands. Marketers and researchers use various perspectives to study brand equity. Customer-based approaches view it from the perspective of the consumer—either an individual or an organization—and recognize that the power of a brand lies in what customers have seen, read, heard, learned, thought, and felt about the brand over time. Customer-based brand equity is thus the differential effect brand knowledge has on consumer response to the marketing of that brand. A brand has positive customer-based brand equity when consumers react more favorably to a product and the way it is marketed when the brand is identified than when it is not identified. A brand has negative customer-based brand equity if consumers react less favorably to marketing activity for the brand under the same circumstances. There are three key ingredients of customer-based brand equity. 1. Brand equity arises from differences in consumer response. If no differences occur, the brand-name product is essentially a commodity, and competition will probably be based on price. 2. Differences in response are a result of consumers' brand knowledge, all the thoughts, feelings, images, experiences, and beliefs associated with the brand. Brands must create strong, favorable, and unique brand associations with customers, as have Toyota (reliability), Hallmark (caring),and Amazon.com (convenience and wide selection). 3. Brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the marketing of a brand. Stronger brands earn greater revenue.
To create customer-based brand equity, what brand features should marketers promote?
Brand equity should be defined in terms of marketing effects uniquely attributable to a brand. Different outcomes result in the marketing of a product or service because of its brand, compared to the results if that same product or service was not identified by that brand.
When the CEO of Burberry decided to "reinforce our heritage, our Britishness, by emphasizing and growing our core luxury products, innovating them and keeping them at the heart of everything we did," what marketing technique was being implemented?
Brand revitalization
11.3 Designing Holistic Marketing Activities (way to build brand equity)
Brands are not built by advertising alone. Customers come to know a brand through a range of contacts and touch points: personal observation and use, word of mouth, interactions with company personnel, online or telephone experiences, and payment transactions. A brand contact is any information-bearing experience, whether positive or negative, a customer or prospect has with the brand, its product category, or its market. Any brand contact can affect consumers' brand knowledge and the way they think, feel, or act toward the brand. Marketers are creating brand contacts and building brand equity through new avenues such as online clubs and consumer communities, trade shows, event marketing, sponsorship, factory visits, public relations and press releases, and social cause marketing. Integrated marketing is about mixing and matching marketing activities to maximize their individual and collective effects.Marketers need a variety of different marketing activities that consistently reinforce the brand promise. We can evaluate integrated marketing activities in terms of the effectiveness and efficiency with which they affect brand awareness and create, maintain, or strengthen brand associations and image.
Which of the following is a focused series of procedures to assess the health of a brand?
C. Brand audit
To show that the NIVEA brand is a superior product with strong and unique brand associations, NIVEA uses a brand promise of "mild," "gentle," and "caring." This an example of ________.
C. brand reinforcement
11.1 Which has been identified as one of the most valuable intangible assets of a firm?
Company brands
11.1 Which of the following is necessary for branding to be successful and brand value to be created?
Consumers are convinced there are meaningful differences among brands.
________ focuses on bottom-line financial value while ________ focuses on strategic issues in managing brands.
Customer equity, brand equity
11.2 Marketing Advantages of Strong Brands
Improved perceptions of product performance Greater loyalty Larger Margins Increased marketing communications effectiveness Possible licensing opportunities Less vulnerability to marketing crises and competitive marketing actions More inelastic consumer response to price increases Improved employee recruiting and retention Greater trade cooperation and support Greater financial market returns
11.3 To make sure employees and marketing partners are inspired about the brand, what should holistic markets consider?
Internal branding
Strategic brand management
It has four main steps: Identifying and establishing brand positioning Planning and implementing brand marketing Measuring and interpreting brand performance Growing and sustaining brand value
11.1 The Scope of Branding ** EXAM
It is a perceptual entity rooted in reality but reflecting the perceptions and idiosyncrasies of consumers. Branding is the process of endowing products and services with the power of a brand. It's all about creating differences between products. Marketers need to teach consumers "who" the product is—by giving it a name and other brand elements to identify it—as well as what the product does and why consumers should care. For branding strategies to be successful and brand value to be created, consumers must be convinced there are meaningful differences among brands in the product or service category. Brand differences often relate to attributes or benefits of the product itself. - Gucci, Chanel, and Louis Vuitton have become category leaders by understanding consumer motivations and desires and creating relevant and appealing images around their stylish products. Successful brands are seen as genuine, real, and authentic in what they sell as well as who they are. Marketers can apply branding virtually anywhere a consumer has a choice. It's possible to brand a physical good (Ford Focus automobile or Lipitor cholesterol medication), a service (Singapore Airlines or Blue Cross and Blue Shield medical insurance), a store (Nordstrom or Dick's Sporting Goods), a person (actress Angelina Jolie or tennis player Roger Federer), a place (the city of Sydney or the country of Ireland), an organization (U2 or the American Automobile Association), or an idea (abortion rights or free trade)
11.4 ________ determines the extent to which value created in the minds and hearts of customers.
Market multiplier
11.3 Building Brand Equity ** EXAM
Marketers build brand equity by creating the right brand knowledge structures with the right consumers. The success of this process depends on all brand-related contacts—whether marketer-initiated or not. Brand equity drivers from Marketing management perspective: ** EXAM 1.The initial choices for the brand elements or identities making up the brand (brand names, URLs, logos, symbols, characters, spokespeople, slogans, jingles, packages, and signage)— 2.The product and service and all accompanying marketing activities and supporting marketing programs 3. Other associations indirectly transferred to the brand by linking it to some other entity (a person, place, or thing)
11.4 notes
Marketers should distinguish brand equity from brand valuation,which is the job of estimating the total financial value of the brand. n these well-known companies, brand value is typically more than half the total company market capitalization. John Stuart, cofounder of Quaker Oats, said: "If this business were split up, I would give you the land and bricks and mortar, and I would take thebrands and trademarks, and I would fare better than you." U.S. companies do not list brand equity on their balance sheets, in part because of differences in opinion about what constitutes a good estimate. However, companies do give it a value in countries such as the United Kingdom, Hong Kong, and Australia.
Marketers must judge each potential brand extension by how effectively it leverages existing brand equity from the parent brand as well as how effectively, in turn, it contributes to the parent brand's equity. Which of the following is a factor that can be used to judge the success of a brand extension?
Optimal points-of-parity and points-of-difference
When a brand is meaningful, different, and salient, consumers will be predisposed to positive purchase behavior, measured by which brand equity metrics?
Power, premium, and potential
11.1 How does branding work?
The American Marketing Association defines a brand as "a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors." These differences may be functional, rational, or tangible—related to product performance of the brand. They may also be more symbolic, emotional, or intangible—related to what the brand represents or means in a more abstract sense. These differences may be functional, rational, or tangible—related to product performance of the brand. They may also be more symbolic, emotional, or intangible—related to what the brand represents or means in a more abstract sense.
company example: using secondary associations
Suppose Burton—the maker of snowboards, snowboard boots, bindings, clothing, and outerwear—decided to introduce a new surfboard called the "Dominator." Burton has gained more than a third of the snowboard market by closely aligning itself with top professional riders and creating a strong amateur snowboarder community around the country.50 To support the new surfboard, Burton could leverage secondary brand knowledge in a number of ways: It could "sub-brand" the product, calling it "Dominator by Burton." Consumers' evaluations of the new product would be influenced by how they felt about Burton and whether they felt that such knowledge predicted the quality of a Burton surfboard. Burton could rely on its rural New England origins, but such a geographical location would seem to have little relevance to surfing. Burton could sell through popular surf shops in the hope that their credibility would rub off on the Dominator brand. Burton could co-brand by identifying a strong ingredient brand for its foam or fiberglass materials (as Wilson did by incorporating Goodyear tire rubber on the soles of its Pro Staff Classic tennis shoes). Burton could find one or more top professional surfers to endorse the surfboard, or it could sponsor a surfing competition or even the entire Association of Surfing Professionals (ASP) World Tour. Burton could secure and publicize favorable ratings from third-party sources such as Surfer or Surfing magazine.
11.7 Customer Equity
The aim of customer relationship management (CRM) is to produce high customer equity. Although we can calculate it in different ways, one definition is "the sum of lifetime values of all customers. As Chapter 5 reviewed, customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling. Acquisition depends on the number of prospects, the acquisition probability of a prospect, and acquisition spending per prospect. Retention is influenced by the retention rate and retention spending level. Add-on spending is a function of the efficiency of add-on selling, the number of add-on selling offers given to existing customers, and the response rate to new offers. ----- The customer equity perspective focuses on bottom-line financial value. Its clear benefit is its quantifiable measures of financial performance. But it offers limited guidance for go-to-market strategies. It largely ignores some of the important advantages of creating a strong brand, such as the ability to attract higher-quality employees, elicit stronger support from channel and supply chain partners, and create growth opportunities through line and category extensions and licensing. The customer equity approach can overlook the "option value" of brands and their potential to affect future revenues and costs. It does not always fully account for competitive moves and countermoves or for social network effects, word of mouth, and customer-to-customer recommendations. ------ Brand equity, on the other hand, tends to emphasize strategic issues in managing brands and creating and leveraging brand awareness and image with customers. It provides much practical guidance for specific marketing activities. With a focus on brands, however, managers don't always develop detailed customer analyses in terms of the brand equity they achieve or the resulting long-term profitability they create.110 Brand equity approaches could benefit from sharper segmentation schemes afforded by customer-level analyses and more consideration of how to develop personalized, customized marketing programs—whether for individuals or for organizations such as retailers. There are generally fewer financial considerations put into play with brand equity than with customer equity.
Which of the following needs to be in place to help build the brand while making it aesthetically appealing?
The brand element is likable.
11.2 Challenges of Brand Equity
The challenge for marketers is therefore ensuring customers have the right type of experiences with products, services, and marketing programs to create the desired thoughts, feelings and brand knowledge. Marketers should also think of the marketing dollars spent on products and services each year as investments in consumer brand knowledge. The quality of that investment is the critical factor, not necessarily the quantity (beyond some threshold amount). It's actually possible to overspend on brand building if money is not spent wisely. Customers' brand knowledge dictates appropriate future directions for the brand. Consumers will decide, based on what they think and feel about the brand, where (and how) they believe the brand should go and grant permission (or not) to any marketing action or program. New-product ventures such as BENGAY aspirin, Cracker Jack cereal, Frito-Lay lemonade, Fruit of the Loom laundry detergent, and Smucker's premium ketchup all failed because consumers found them inappropriate extensions of the brand.
What is the definition of customer equity?
The sum of lifetime values of all customers
11.3 Leveraging Secondary Associations ** EXAM
The third and final way to build brand equity is, in effect, to "borrow" it. That is, create brand equity by linking the brand to other information in memory that conveys meaning to consumers These "secondary" brand associations can link the brand to sources such as the company itself (through branding strategies), to countries or other geographical regions (through identification of product origin), and to channels of distribution (through channel strategy), as well as to other brands (through ingredient or co-branding), characters (through licensing), spokespeople (through endorsements), sporting or cultural events (through sponsorship), or some other third-party sources (through awards or reviews).
11.3 Internal Branding
They must adopt an internal perspective to be sure employees and marketing partners appreciate and understand basic branding notions and how they can help—or hurt—brand equity. Internal branding consists of activities and processes that help inform and inspire employees about brands. Holistic marketers must go even further and train and encourage distributors and dealers to serve their customers well. Poorly trained dealers or other intermediaries can ruin the best efforts to build a strong brand image. Brand bonding occurs when customers experience the company as delivering on its brand promise. All the customers' contacts with company employees and communications must be positive. The brand promise will not be delivered unless everyone in the company lives the brand. COMAPNY EXAMPLE: DISNEY (GOOD AT INTERNAL CULTURE THAT MATCHES BRAND). Some important principles for internal branding are: Choose the right moment. - Turning points are ideal opportunities to capture employees' attention and imagination. Link internal and external marketing. -Internal and external messages must match. ord's newbranding push to "Go Further" targets car buyers as well as Ford employees. Bring the brand alive for employees. -Internal communications should be informative and energizing. Starbucks created a major facility and exhibit to physically immerse managers and employees in the brand experience. Bring the brand alive for employees. -Internal communications should be informative and energizing. Starbucks created a major facility and exhibit to physically immerse managers and employees in the brand experience.
11.4 what is a brand worth?
Top brand-management firm Interbrand has developed a model to formally estimate the dollar value of a brand. It defines brand value as the net present value of the future earnings that can be attributed to the brand alone. The firm believes marketing and financial analyses are equally important in determining the value of a brand. Market Segmentation—The first step is to divide the market(s) in which the brand is sold into mutually exclusive segments that help determine variations among the brand's different customer groups. Financial Analysis—Interbrand assesses purchase price, volume, and frequency to help calculate accurate forecasts of future brand sales and revenues. Once it has established Brand Revenues, it deducts all associated operating costs to derive earnings before interest and tax (EBIT). It also deducts the appropriate taxes and a charge for the capital employed to operate the underlying business, leaving Economic Earnings, that is, the earnings attributed to the branded business. Role of Branding—Interbrand next attributes a proportion of Economic Earnings to the brand in each market segment by first identifying the various drivers of demand and then determining the degree to which the brand directly influences each. The Role of Branding assessment is based on market research, client workshops, and interviews and represents the percentage of Economic Earnings the brand generates. Multiplying the Role of Branding by Economic Earnings yields Brand Earnings. Brand Strength—Interbrand then assesses the brand's strength profile to determine the likelihood that the brand will realize forecasted Brand Earnings. This step relies on competitive benchmarking and a structured evaluation of the brand's clarity, commitment, protection, responsiveness, authenticity, relevance, differentiation, consistency, presence, and understanding. For each segment, Interbrand applies industry and brand equity metrics to determine a risk premium for the brand. The company's analysts derive the overall Brand Discount Rate by adding a brand-risk premium tothe risk-free rate, represented by the yield on government bonds. The Brand Discount Rate, applied to the forecasted Brand Earnings forecast, yields the net present value of the Brand Earnings. The stronger the brand, the lower the discount rate, and vice versa. Brand Value Calculation—Brand Value is the net present value (NPV) of the forecasted Brand Earnings, discounted by the Brand Discount Rate. The NPV calculation is composed of both the forecast period and the period beyond, reflecting the ability of brands to continue generating future earnings.
11.6 "Branded House"
With a branded house strategy, it is often useful to have a well-defined flagship product. A flagship product is one that best represents or embodies the brand as a whole to consumers. It often is the first product by which the brand gained fame, a widely accepted best-seller, or a highly admired or award-winning product. Flagship products play a key role in the brand portfolio in that marketing them can have short-term benefits (increased sales) as well as long-term benefits (improved brand equity for a range of products).
For continued brand success, ________ should be a top priority for any organization.
achievement of brand equity
11.1 A ________ is represented by a name, term, symbol, or design, intended to identify the goods or services of a seller as different from those of the competition.
brand
When consumers no longer associate a brand with a specific or highly similar set of products, ________ occurs.
brand dilution
Because consumer responses to marketing activity depend on what they know and remember about a brand, as the brand value chain suggests, changing ________ will increase or decrease the long-term success of future marketing actions.
brand knowledge ** EXAM
Which of the following is necessary for branding to be successful and brand value to be created?
branding creates mental structures that help consumers organize their knowledge about products and services in a way that clarifies their decision making and, in the process, provides value to the firm.
11.5 The two ways to manage brand equity are use of ________ and ________.
brand reinforcement, brand revitalization
In order to treat brands as corporate assets, marketers should ________.
develop the brand strategy in tandem with the brand asset
11.1 A brand is "a name, term, sign, symbol, or design, or a combination of them," intended to identify the goods or services of one seller or group of sellers and ________.
differentiate them from those of the competitors
A brand is "a name, term, sign, symbol, or design, or a combination of them," intended to identify the goods or services of one seller or group of sellers and ________.
ifferentiate them from those of the competitors. Next Question
The advantage of using brand extension to launch new products can result in ________.
improved odds of new-product success
Brands
one of the most valuable intangible assets of a company
11.2 When consumers react favorably to a product and the way it is marketed, ________ has been developed.
positive customer-based brand equity
11.2 Based on the brand resonance model, ______________ refers to how often and easily customers think of the brand.
resonance
11.6 A firm's branding strategy is often called ________ and reflects the number and nature of both common and distinctive brand elements. ** EXAM
the brand architecture
11.1 quiz questions Which of the following is a benefit of a brand for an organization?
the brand signals levels of quality, increasing brand loyalty by consumers.
Brands require careful planning, a deep and long-term commitment, and creatively designed and executed marketing. For those reasons, they are ________ of a firm that offer a number of benefits to customers and firms and therefore need to be managed carefully.
they are valuable intangible assets of a firm that offer a number of benefits to customers and firms and need to be managed carefully.
11.2 Questions Which of the following pair of companies has a high degree of brand resonance?
Harley-Davidson and Apple
Brands can be measured using two approaches. The ________ approach assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures. The ________ approach assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing. ** EXAM
indirect; direct