MKT 4451 Exam 2 Ch. 8
Growing the core can be a less risky alternative for growth than expansion into new product categories.
T
One of the selection criteria for creating a successful brand element is that it should be protectable.
T
To achieve integrated marketing, marketers need a variety of different marketing activities that consistently reinforce the brand promise.
T
Compare and contrast brand equity and customer equity.
The brand equity and customer equity perspectives both emphasize the importance of customer loyalty and the notion that we create value by having as many customers as possible pay as high a price as possible. In practice, however, the two perspectives emphasize different things. 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. 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.
List and briefly describe the four roles brands can play as part of a brand portfolio.
The four roles are: 1. Flankers-or fighting brands. These are positioned with respect to competitors' brands so that more important (and more profitable) flagship brands can retain their desired positioning. 2. Cash cows-some brands may be kept around despite dwindling sales because they still manage to hold on to a sufficient number of customers and maintain their profitability with virtually no marketing support. These "cash cow" brands can be effectively "milked" by capitalizing on their reservoir of existing brand equity. 3. Low-end entry-level-the role of the 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. 4. High-end prestige-the role of a high-priced brand in the brand family often is to add prestige and credibility to the entire portfolio.
Assume you are a marketing manager and want to adopt strategic brand management. List the four main steps that you would most likely go through to accomplish this task.
1. identifying and establishing brand positioning 2. planning and implementing brand marketing 3. measuring and interpreting brand performance 4. growing and sustaining brand value
) Brand ________ are devices that can be trademarked and serve to identify and differentiate the brand. A) elements B) value propositions C) perceptions D) images E) extensions
A
A ________ consists of all products-original as well as line and category extensions-sold under a particular brand. A) brand line B) cobrand C) generic brand D) licensed product E) subbrand
A
According to BrandAsset® Valuator model, leadership brands show ________. A) high levels of energy, differentiation, relevance, knowledge, and esteem B) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still C) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still D) low levels on energy, differentiation, relevance, knowledge, and esteem E) high knowledge-evidence of past performance-a lower level of esteem, and even lower relevance, energy, and differentiation
A
According to the BRANDZ model of brand strength, brand building involves people progressing through a sequential series of steps. Which of these steps would address or answer the question "Can this brand deliver?" A) performance B) bonding C) advantage D) relevance E) presence
A
Apple's iPod Shuffle is an example of ________. A) a sub-brand B) a parent brand C) family brand D) a brand mix E) an umbrella brand
A
Aromas Inc. introduced a new line of shower gels. To analyze consumer reaction, the company interviewed people who bought them. When Sarah was asked why she had chosen the new shower gel, she said she bought it because a friend recommended it. Sarah is at which level of the BrandDynamics Pyramid? A) presence B) bonding C) relevance D) performance E) advantage
A
Christian Louboutin is a footwear designer who launched his line of high-end women's shoes in France in 1991. Since 1992, his designs have incorporated the shiny, red-lacquered soles that have become his signature. These red-lacquered soles and high stilettos of Louboutin distinguish him from other designer shoe brands. In accordance with the BrandAsset® Valuator model, which of the following components of brand equity has Louboutin fulfilled in this scenario? A) energized differentiation B) relevance C) esteem D) knowledge E) advantage
A
Galaxy chocolate has successfully competed with Cadbury by positioning itself as "your partner in chocolate indulgence" and featuring smoother product shapes, more refined taste, and sleeker packaging, which represents which of the following main strategies for growing the core of the business? A) Make the core of the brand as distinctive as possible. B) Drive distribution through both existing and new channels. C) Offer the core product in new formats or versions. D) Increase costs and revenue. E) Expand to another geographic region.
A
The brand name of New Zealand vodka 42BELOW refers to both a latitude that runs through New Zealand and the percentage of its alcohol content. From a marketing management perspective, which of the brand equity drivers is most applicable in the given scenario? A) the associations indirectly transferred to the brand by linking it to a place or thing B) the product and all accompanying marketing activities and supporting marketing programs C) the initial choices for the brand elements or identities making up the brand D) the profitability associated with brand development E) the service and all accompanying marketing activities and programs
A
The failure of Cracker Jack cereal is an example of consumers' ________ dictating that the extensions were inappropriate for the brand. A) brand knowledge B) brand equity C) brand stature D) power grid E) brand salience
A
The introduction of Diet Coke by the Coca-Cola Company is an example of ________. A) line extension B) brand harmonization C) category extension D) brand dilution E) co-branding
A
When a consumer expresses thoughts, feelings, images, experiences, and beliefs associated with the brand, the consumer is expressing ________. A) brand knowledge B) ethnocentric bias C) self-serving bias D) cognitive dissonance E) brand identity
A
When a marketer expresses his or her vision of what a brand must be and do for consumers, he or she is expressing what is called a brand ________. A) promise B) personality C) identity D) position E) revitalization
A
Which of the following is a defensive criterion for choosing brand elements? A) adaptable B) memorable C) meaningful D) likeable E) significance
A
________ brands are positioned with respect to competitors' brands so that more important (and more profitable) flagship brands can retain their desired positioning. A) Flanker B) Attacker C) Defender D) Cash cow E) Simulation
A
According to the BrandAsset® Valuator model, strong new brands show ________. A) higher levels of esteem and knowledge than relevance, whereas both differentiation and energy are lower still B) higher levels of differentiation and energy than relevance, whereas both esteem and knowledge are lower still C) high knowledge-evidence of past performance-a lower level of esteem, and even lower relevance, energy, and differentiation D) high levels on energy, differentiation, relevance, knowledge, and esteem E) low levels on energy, differentiation, relevance, knowledge, and esteem
B
Adam wants to buy a washing machine and is looking for something that is not too expensive. When he goes to make the purchase, he finds there are two options that meet his requirements. One is a Maytag product, while the other is a newly imported South Korean brand. Adam is not very familiar with the latter and does not hesitate in choosing Maytag. This example implies that ________. A) the imported brand will not survive the competition from Maytag B) Maytag has positive customer-based brand equity C) the South Korean company has a low advertising budget D) the imported brand is unreliable E) the Maytag washing machine has better features than the imported brand
B
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 ________ the parent brand. A) diluting B) cannibalizing C) reinforcing D) eroding E) revamping
B
The first step in the strategic brand management process is ________. A) measuring consumer brand loyalty B) identifying and establishing brand positioning C) planning and implementing brand marketing D) measuring and interpreting brand performance E) growing and sustaining brand value
B
Two advantages of ________ are that they can facilitate new-product acceptance and provide positive feedback to the parent brand and company. A) product licensing B) brand extensions C) brand architecture D) brand audits E) brand dilutions
B
Which of the following is NOT a weakness of a customer equity perspective (relative to a brand equity perspective)? A) It offers limited guidance for go-to-market strategies. B) It has quantifiable measures of financial performance. C) It ignores the advantages of creating a strong brand. D) It overlooks the option value of brands. E) It does not fully account for social network effects or word-of-mouth.
B
Distinguish between brand equity and brand valuation.
Brand equity is the added value endowed to products and services. Brand valuation is the job of estimating the total financial value of the brand.
Define brand equity.
Brand equity is the added value endowed to products and services. This value may be reflected in how consumers think, feel, and act with respect to the brand, as well as the prices, market share, and profitability that the brand commands for the firm.
Define brand knowledge and explain its role in brand equity.
Brand knowledge consists of all the thoughts, feelings, images, experiences, beliefs, and so on that become associated with the brand. When brands must create strong, favorable, unique brand associations with customers, they create positive customer-based brand equity. Then, when the brand is identified, customers react more favorably to the product and the way it is marketed.
From a marketing management perspective, there are three main sets of brand equity drivers. Which of these drivers was most applicable when McDonald's decided to use the "golden arches" and Ronald McDonald as symbols of their brand? A) the product and all accompanying marketing activities and supporting marketing programs B) the service and all accompanying marketing activities and programs C) the initial choices for the brand elements or identities making up the brand D) associations indirectly transferred to the brand by linking it to some other entity E) the profitability associated with brand development
C
Summarize the steps in brand revitalization, and name an example of a brand that has been revitalized.
Brand revitalization begins with understanding the original sources of brand equity and evaluating changes in negative and positive associations. Based on this information, the marketers decide whether to retain the same positioning or create a new one and, if so, which new one. If the actual marketing program is the source of the problem, a back-to-basics strategy may make sense. In other cases, the old positioning is no longer viable, so a reinvention strategy is necessary. The challenge is to change enough to attract some new customers without alienating old customers. Examples named in the text are Cadillac, Fiat, and Volkswagen. Students may name a different example.
What valuable functions can brands perform for a firm
Brands perform a number of valuable functions for firms. First, they simplify product handling or tracing. Brands help to organize inventory and accounting records. A brand also offers the firm legal protection for unique 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. These intellectual property rights ensure that the firm can safely invest in the brand and reap the benefits of a valuable asset. 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. Loyalty also can translate into customer willingness to pay a higher price.
) With respect to the "six brand building blocks," brand ________ describes the relationship customers have with the brand and the extent to which they feel they're "in sync" with it. A) imagery B) judgment C) resonance D) salience E) performance
C
A brand ________ is the set of all brands and brand lines a particular firm offers for sale to buyers in a particular category. A) architecture B) position C) portfolio D) extension E) image
C
A major advantage of a ________ strategy is that if the product fails, the company has not tied its reputation to the product. A) blanket family name B) licensing C) separate family brand name D) category extension E) brand revitalization
C
Branding is ________. A) all about creating unanimity between products B) the process of performing market research and selling products or services to customers C) endowing products and services with the power of a brand D) the process of comparing competing brands available in the market E) use of online interactive media to promote products and brands
C
Red Bull enlisted college students as "Red Bull student brand managers" to distribute samples, research drinking trends, design on-campus product promotion activities, and write stories for student newspapers. From a marketing management perspective, which of the following brand equity drivers is most applicable in the given scenario? A) the profitability associated with brand development B) associations indirectly transferred to the brand by linking it to a person C) the product and all accompanying marketing activities and supporting marketing programs D) the initial choices for the brand elements or identities making up the brand E) associations indirectly transferred to the brand by linking it to a place
C
Using an established brand to introduce a new product is called brand ________. A) harmonization B) valuation C) extension D) positioning E) parity
C
WD40 offers a Smart Straw version of its popular multipurpose lubricant with a built-in straw that pops up for use. This is an example of which of the following main strategies for growing the core of the business? A) Make the core of the brand as distinctive as possible. B) Drive distribution through both existing and new channels. C) Offer the core product in new formats or versions. D) Increase costs and revenue. E) Expand to another geographic region.
C
With respect to powerful brand elements, ________ is an extremely efficient means to build brand equity. This element functions as a useful "hook" to help consumers grasp what the brand is and what makes it special. A) the tangibility of a product B) a product's shape C) a slogan D) a patent E) a copyright
C
Consumers may evaluate identical products differently depending on how they are branded.
T
In what ways can brand extensions improve the odds of new-product success?
Consumers make inferences and form expectations about the composition and performance of a new product based on what they already know about the parent brand and the extent to which they feel this information is relevant to the new product. By setting up positive expectations, extensions reduce risk and may make it easier to convince retailers to stock and promote a brand extension because of increased customer demand. From a marketing communications perspective, an introductory campaign for an extension doesn't need to create awareness of both the brand and the new product, but instead can concentrate on the new product itself.
Define customer equity, and describe three things that affect customer lifetime value
Customer equity is the sum of lifetime values of all customers. Customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling.
AT&T's business campaign not only helped to change public perceptions of the company, it also signaled to employees that AT&T was determined to be a leader in telecommunication services. Which principle of internal branding does this example portray? A) choosing the right moment to capture employees' attention and imagination B) furnishing energizing and informative internal communication C) bringing the brand alive for employees D) linking internal and external marketing E) understanding how brand communities work
D
Brand ________ is the job of estimating the total financial worth of the brand. A) tracking B) auditing C) equity D) valuation E) harmonization
D
In its focus on bottom-line financial value, the ________ approach offers limited guidance for go-to-market strategies and does not fully account for competitive moves. A) brand equity B) brand value chain C) customer tracking D) customer equity E) brand extension
D
The American Marketing Association defines a ________ 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." A) copyright B) trademark C) slogan D) brand E) logo
D
Which of the following is a marketing advantage of strong brands? A) no vulnerability to marketing crises B) more elastic consumer response to price increases C) guaranteed profits D) additional brand extension opportunities E) more inelastic consumer response to price decreases
D
A brand ________ can be defined as any information-bearing experience a customer or prospect has with the brand, its product category, or its market. A) value B) personality C) trait D) character E) contact
E
A consumer who expresses rational and emotional attachments to a brand to the exclusion of most other brands has reached the ________ level in the BrandDynamics Pyramid. A) advantage B) relevance C) presence D) performance E) bonding
E
In response to the need to reinforce the brand promise, ________ is about mixing and matching marketing activities to maximize their individual and collective effects. A) personalized marketing B) mass customization C) globalized marketing D) relationship marketing E) integrated marketing
E
With respect to the brand building pyramid, at which of the following "building block levels" would we expect the consumer to develop an intense, active loyalty? A) salience B) imagery C) feelings D) judgments E) resonance
E
_______ are a means of understanding where, how much, and in what ways brand value is being created to facilitate day-to-day decision making. A) Internal marketing campaigns B) Brand portfolio audits C) Brand value chains D) Sales cycles E) Brand-tracking studies
E
) In Interbrand's brand valuation model, Brand Value is the likelihood the brand will realize forecasted Brand Earnings.
F
According to the BrandZ model, "Bonded" consumers at the lower levels of the pyramid build stronger relationships with and spend more on the brand than those at the top.
F
An important part of reinforcing brands is providing uniform and unchanging marketing support.
F
Customer equity is synonymous with brand equity
F
Growth strategies are "either/or" propositions; a focus on core businesses means foregoing new market opportunities.
F
Physical goods, services, and stores can be branded, but ideas and people cannot.
F
The indirect approach to assessing brand equity assesses the actual impact of brand knowledge on consumer response to different aspects of marketing.
F
The role of a relatively high-priced brand in a portfolio is often to attract customers to the brand franchise or to "build traffic."
F
When Honda expanded its brand into such areas as automobiles, snow blowers, and marine engines, it was pursuing a strategy called line extension.
F
Kellogg's uses its corporate brand name with its individual product brands as with Kellogg's Rice Krispies, Kellogg's Raisin Bran, and Kellogg's Corn Flakes. Which branding strategy is being used by the company?
Kellogg's 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.
How can marketers reinforce brand equity?
Marketers can reinforce brand equity by consistently conveying the brand's meaning in terms of what products it represents, what core benefits it supplies, and what needs it satisfies; and how the brand makes products superior, and which strong, favorable, and unique brand associations should exist in consumers' minds.
Customer lifetime value is affected by revenue and by the costs of customer acquisition, retention, and cross-selling.
T
) Brand equity can be built by linking the brand to sources, such as channels of distribution, as well as to other brands.
T
) Driving sales and revenue growth can be more challenging in mature markets.
T
) One of the advantages of having a strong brand is the ability to have a more elastic consumer response to price decreases of the brand.
T
A brand audit can assess the health of a brand and uncover sources of brand equity.
T
A firm's branding strategy is also called the brand architecture.
T
Brand extensions can reduce the costs of introductory launch campaigns and make it easier to convince retailers to stock and promote a new product.
T
In the brand resonance model of brand equity, the creation of significant brand equity involves reaching the top or pinnacle of the brand pyramid. What are the six components of this pyramid?
The six components of the brand resonance pyramid include: 1. brand salience-relates to how often and easily the brand is evoked under various purchase or consumption situations 2. brand performance-relates to how the product or service meets customers' functional needs 3. brand imagery-deals with the extrinsic properties of the product or service, including the ways in which the brand attempts to meet the customers' psychological or social needs 4. brand judgments-focus on consumers' own personal opinions and evaluations 5. brand feelings-customers' emotional responses and reactions with respect to the brand 6. brand resonance-refers to the nature of the relationship that customers have with the brand and the extent to which customers feel that they are "in sync" with the brand
List the six criteria used in choosing brand elements
The six criteria are: 1. memorable 2. meaningful 3. likable 4. transferable 5. adaptable 6. protectable
According to the BrandZ model of brand strength, brand building involves a series of five sequential steps. What are those five sequential steps?
The steps are in ascending order: 1. presence 2. relevance 3. performance 4. advantage 5. bonding
Given that the power of a brand resides in the minds of consumers and how it changes their response to marketing, there are two basic approaches to measuring brand equity. Briefly, describe each of these approaches.
The two approaches are: 1. an indirect approach that assesses potential sources of brand equity by identifying and tracking consumer brand knowledge structures 2. a direct approach that assesses the actual impact of brand knowledge on consumer response to different aspects of the marketing
Describe the meaning and function of a brand audit.
To better understand the sources of brand equity and how they affect outcomes of interest, marketers often need to conduct brand audits. 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. A good brand audit provides keen insights into consumers, brands, and the relationship between the two.
Describe the function of brand-tracking studies.
To understand how the sources and outcomes of brand equity change, if at all, over time, marketers conduct brand tracking studies. These studies collect quantitative data from consumers over time to provide 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.
Identify the three main strategies for growing a company's core, as noted by UK marketing guru David Taylor, and provide an example for each.
UK marketing guru David Taylor advocates three main strategies: 1. Make the core of the brand as distinctive as possible. Galaxy chocolate has successfully competed with Cadbury by positioning itself as "your partner in chocolate indulgence" and featuring more refined taste and sleeker packaging. 2. Drive distribution through both existing and new channels. Costa Coffee, the number-one coffee shop in the United Kingdom, has found new distribution routes using drive-through outlets, vending machines, and in-school locations. 3. Offer the core product in new formats or versions. WD40 offers a Smart Straw version of its popular multipurpose lubricant with a built-in straw that pops up for use.
Identify five of Kotler and Kotler's general strategies for growth.
grow by building your market share ∙ grow by developing committed customers and stakeholders ∙ grow by building a powerful brand ∙ grow by innovating new offerings and experiences ∙ grow by international expansion ∙ grow by acquisitions, mergers, and alliances ∙ grow by building an outstanding reputation for social responsibility ∙ grow by partnering with government and nongovernmental organizations
