Brand Management presentation

1. Customer-Based Brand Equity
Part 1
Chapter 2
Lilly Beil, Jennifer Butler, Emily Huang

2. Customer-Based Brand Equity
CBBE Model: incorporates theoretical advances and
managerial practices in understanding and influencing
consumer behavior.
Aka: understanding the needs or wants of the customer

3. CBBE Basic Premise
The power of a brand lies in what consumers have learned,
felt, seen, and heard about the brand as a result of their
experiences.

4. 3 Ingredients to CBBE Model
 Differential effect
 Brand Knowledge
 Consumer response to marketing

5. Differential Effect
 Brand equity arises from differences in consumer
response
 No differences = Commodity
 If a commodity, competition becomes based on price
 Examples: Who has the better french fries? McDonalds or
Burger King?

6. Brand Knowledge
 Drives brand equity
 Associative network memory model: views memory as a
network of nodes and links, in which nodes represent
stored information or concepts
 Knowledge about the brand changes the consumer’s
perception of the brand
 For example: Apple

7. Brand Knowledge cont.
 Can be characterized in terms of 2 components:
 Brand awareness: strength of the brand node or trace in
memory; ability to identify brand under different conditions
 Brand image: perceptions about a brand held in consumer’s
memory
 Examples: Apple  user friendly, creative, iPhone, iPad
 Class activity

8. What is the association that comes to
mind with these brands?

9. What is the association that comes to
mind with these brands?

10. What is the association that comes to
mind with these brands?

11. What is the association that comes to
mind with these brands?

12. What is the association that comes to
mind with these brands?

13. Consumer Response to
Marketing
 How does a company’s marketing techniques effect the
consumer?
 What kind of feelings are stirred in their marketing
techniques?

14. Sources of Brand Equity
 Reminder: CBBE occurs when the consumer has a high
level of awareness and familiarity with the brand and
holds in their memory some strong, favorable, and unique
brand associations
 Key to Branding: Consumers must not think that all brands
in the category are the same!

15. Brand Awareness
 Brand recognition: relates to customers’ ability to confirm
exposure to the brand when given the brand as a cue
 Can consumers correctly identify a brand?
 If a consumer is aware of a specific brand, it is put into a
“consideration set”.
 Sometimes if a consumer is only aware of one brand of a
certain product or service, they will only consider that one
brand
 Class question: Is there a specific brand you always choose
because it’s the only brand you are aware of? For example:
medicine

16. 3 main reasons brand awareness is
important in consumer behavior:
 Learning advantages
 Creation of a brand image  brand node has been
established in memory
 Consideration advantages
 Increase of brand awareness, increase of consideration set
 Choice advantages
 Brand awareness increases association even if there isn’t
any other associations to those brands
 When consumers have low involvement in purchasing
decisions, they will choose the brand they are most aware of

17. Brand awareness cont.
 Develop a slogan, jingle, or ad that creatively pairs the
brand and the appropriate category
 Video:
https://www.youtube.com/watch?v=VBAwXN8lS88

18. Brand Image
Ways brand associations can be created:
 Direct experience
 Information communication
 Word of mouth
 Assumptions from the brand itself
 Identification of the brand with a company, country,
channel of distribution, particular person, particular
place, and particular event

19. Brand image cont.
 Word of mouth is very important for restaurants,
entertainment, banking, and personal services
 See Figure 2.4 page 63
 Favorable brand associations: created by convincing
consumers that the brand possesses attributes and
benefits that satisfy their needs and wants

20. Brand Desirability
Depends on three factors:
 How relevant consumers find the brand
association
 How distinctive consumers find the brand
association
 How believable consumers find the brand
association

21. Deliverability
 Creating a favorable association also requires that the
firm be able to deliver on the desired association
 What would be the cost or investment necessary and the
length of time involved to create or change the desired
association?
 Depends on 3 factors:
 The actual or potential ability of the product to perform
 The prospects of communicating that performance
 The sustainability of the actual and communicated
performance over time

22. 4 Steps to Building a Brand
1. Identify the brand with customers and associate the brand in
customers’ minds with a specific product class or customer
need
Who are you?
2. Establish the totality of brand meaning in the minds of
customers by strategically linking a host of tangible and
intangible brand associations with certain properties
What are you?
3. Elicit the proper customer responses to this brand identification
and brand meaning
What about you? What do I think or feel about you?
4. Convert brand response to create an intense, active loyal
relationship between customers and the brand
What about you and me? What kind of association and how much of
a connection would I like to have with you?

23. Brand Building Blocks
Resonance
FeelingsJudgements
Performance Imagery

24. Breadth and depth of awareness
 Breadth: the range of purchase and usage situations in
which the brand element comes to mind
 Depth: the likelihood that a brand element will come to
mind and the ease with which it does so

25. Brand Performance
 Ways a brand tries to meet needs
 5 important types of attributes and benefits that often
underlie brand performance:
 Primary ingredients and supplementary features
 Product reliability, durability, and serviceability
 Service effectiveness, efficiency and empathy
 Style and design
 Price

26. Brand Imagery
 Extrinsic properties of the product or service, including
the ways in which it attempts to meet customer’s
psychological or social needs
 Customers will be targeted demographically and
psychographically

27. Brand Personality
 Personality traits can be shown through product
animation techniques or celebrities used in ads
 Tone is important
 Personality needs to be consistent with the brand
 Watch ad here 
https://www.youtube.com/watch?v=kPK8B7IiHTo
 What kind of personality is CoverGirl trying to portray?

28. Brand Judgements
 Focus on customers’ personal opinions and evaluations
 In terms of creating a strong brand, four types of
summary brand judgments are particularly important:
 Quality
 Credibility
 Consideration
 Superiority

29. Brand Feelings
 What emotions are evoked when the consumer sees the
brand?
 Is there…
 Warmth
 Fun
 Excitement
 Security
 Social approval
 Self-respect

30. Brand Resonance
 Intensity or psychological depth/bond with the brand
 Behavioral loyalty
 Attitudinal attachment
 Sense of community
 See Harley Davidson Video:
https://www.youtube.com/watch?v=iOF7aAVZMqA
 Active engagement

31. Brand Salience
 Relates to aspects of the awareness of the brand
 How often and easily is the brand evoked under various
situations or circumstances
 To what extent is the brand easily recalled or
recognized?
 Brand awareness is more than just recognizing the
company! Watch this video 
https://www.youtube.com/watch?v=L7iLi76BcCc

32. Creating Customer Value
 Customer-brand relationships are the foundation of
brand resonance and building a strong brand.
 CBBE model: Power of a brand resides in the minds of
consumers and customers.
Achieve Customer Value by Putting Customers First

33. Creating Customer Value
 Putting Customers First
1. Is the company looking for ways to take care of you?
2. Does the company know its customers well enough
to differentiate between them?
3. Is someone accountable for customers?
4. Is the company managed for shareholder value?
5. Is the company testing new customer offers and
learning from the results?

34. Case Study
 Had a remarkable revival in the 1990s
with 50% growth for 7 years
 Turn of the century took a turn for the
worst.
 2005: Stagnant Sales & losing money
in US market
 Culprit? CEO says VW was not
customer-focused
 Focused too much on technology
advancement
 « How does it help the customer and
will the customer pay for it? »

35. Case Study
 Google Glass
 Google announced in
January that Glass would
be going away “as we
know it.”
 Hyped up product
 Time Magazine named it
one of the “Best
Inventions of the Year”
 Comedic Punch Line: The
Simpsons, Saturday Night
Live, The Colbert Report.
 Tumblr account
“White Men Wearing
Google Glass”

36. The Marketing Advantages of Strong
Brands
 Greater loyalty and less vulnerability to competitive
marketing
 Larger margins
 Greater trade co-operation and support
 Increased marketing communication effectiveness
 Licensing opportunities
 Additional brand extension opportunities

37. Which brands do you have
the most resonance with?
Why?

38. Things to Remember:
 Customer-based brand equity has 3 ingredients:
 Differential effect
 Brand knowledge
 Consumer response to marketing
 The power of a brand lies in what the consumers have
experienced with your brand!
 Good brand positioning helps guide your marketing
strategy.

39. Part 2
Chapter 3: Brand Positioning

40. Identifying and Establishing Brand
Positioning
 “The heart of the marketing strategy”
 Brand Positioning: the act of designing the company’s
offer and image so that it occupies a distinct and valued
place in the target customer’s mind.
 Good brand positioning helps guide marketing strategy

41. Can you identify the Target Markets
of these Companies?

42.  “upscale homeless person, who has a slight degree
of angst and is probably in the life stage of 18 to 26”
 From traditional homes and advantage, but this
offers them the benefit of rebellion
 The Urban shopper “leads a pretty cloistered
existence.”
 “Although they deem themselves worldly, they
believe the way they see things personally is the
correct way and everyone else feels exactly the
same way.”

43.  “…Probably when they were little, they saw the older kids
do something they thought was really cool, and they
weren’t allowed to do it and now that they’re adults, it’s
sort of like ice cream for breakfast, they can do whatever
they want now. They’re out on their own, independent.
So one thing that actually Urban Outfitters is selling now is
Beavis and Butthead tees, which sort of surprised me
because I was no fan of it, but maybe I was little bit older
then, but that was in 1992 … They undoubtedly probably
don’t know anything about Beavis and Butthead but
simply remember that being something the older cool
kids did and something, clearly, they were denied.”
Urban Outfitters Executive Director Sue Otto

44.  The Anthropologie customer is a bit more polished, a bit more older
and she has much less angst … She tends to be a homeowner and she
tends to be in a relationship and more likely than not, married with
children.”
 We say that this is the customer you want to have at a dinner table.
She’s an optimist. She’s aware of what’s going on in the world, but she
chooses to focus on the positives, not the negatives … She shops at
J.Crew, she shops at Nordstrom, she shops at boutiques … She may go
to Banana Republic for a basic pant, but she’s not buying her wardrobe
there. She’s not shopping at Ann Taylor. She’s certainly not shopping at
Chico’s.”
 The Anthropologie customer is dressing for respectability in her
community, with her friends and family.”

45. “The Free People customer is happy. She loves life. She is
independent yet loves being with her friends, her family,
and her mate. She travels every spring to festivals,
Coachella and Wanderlust being her favorite. She runs and
practices yoga to stay fit and balanced. She is influenced
by fashion but yet seeks inspiration from all over the world
to put together a look that is her own. She is a mix of sweet,
cool, and boho and everything in between. We target age
26…” — Meg Hayne, Free People president

46. Segmentation bases
Business-to-Business segmentation bases

47. Segmentation bases
Consumer Segmentation
bases

48. Nature of Competition
 Deciding to target a certain type of consumer defines
the nature of competition because certain other firms
have also decided to target that segment or consumers
in that segment may already look to certain brands.
 Some products and brands are likely to be seen as close
substitutes

49. Points of Difference associations
 Points of difference are strong, favorable and unique
associations for a brand
 They may be based on almost any type of attribute or
benefit association that consumers strongly associate
with a brand, positively evaluate and believe that they
could not find to the same extent with a competitive
brand.
 Gives consumers a compelling reason to buy a product
that competitors could not match

50. Points of Parity associations
 Associations that may be shared with other brands
 2 forms: category and competitive
 Category points of parity: associations that consumers view
as being necessary
 Competitive points of parity: associations designed to
negate competitor’s point of difference
 If a brand can ‘break even’ in areas where its competitors
are trying to find an advantage and can achieve
advantages in some other areas, the brand should be in a
strong position.

51. Points of Parity vs. Points of Difference
 Points of parity are usually easier to achieve because
they’re more basic
 Points of difference are what demonstrates a brand’s
superiority
Which is more important?

52. Positioning Guidelines
 Guided by points of difference and points of parity
 Two Issues
 Defining and communicating the competitive frame of
reference
 Choosing and establishing points of parity and points of
difference

53. Defining and Communicating the
Competitive Frame of Reference
 Determine category membership
 Products that the brand competes with
 Helps make customers aware of that brand’s products
 Customer awareness must happen before they will look at the
POD’s and POP’s
 Some companies straddle two frames – BMW
 Three ways to convey category membership
1. Communicate category benefits – product attributes and
POP’s
2. Compare with Exemplars
3. Relying on Product Descriptors – convey category origin

54. Choosing Points of Parity and Points
of Difference
 Consumers must find POD’s desirable and believe the
firm can deliver them
 Criteria of desirability
1. Relevance
2. Distinctiveness
3. Believability
 Criteria of Deliverability
1. Feasibility – product performs at stated level
2. Communicability – create and strengthen desired
associations
3. Sustainability – performance over time

55. Establishing Points of Parity and Points
of Difference
 Attributes of POP’s are negatively correlated with
attributes of POD’s
 How to deal with negative correlation:
1. Separate the attributes – two marketing campaigns
2. Exploit Equity of Another Entity – link brand to a person,
other brand, or event and steal equity
3. Redefine the relationship – convince consumers they are
positively correlated
https://m.youtube.com/watch?v=0nBxcMImubk

56. Updating Positioning Over Time
 Two Issues
 Laddering – how to deepen brand and tap into core brand associations
 Maslow’s Hierarchy
 Means end chain: attributes lead to benefits, which lead to values
 When brands become associated with more products they move up the product
hierarchy
 Reacting – how to respond to competitive challenges that threaten the brand’s
current position
 Competitors take actions to eliminate POD’s and make the POP’s or establish new
POD’s
 Three options when this happens:
1. Do nothing – if competitive actions are unlikely to capture the POD
2. Go on defense – strengthen your POD’s and POP’s
3. Go on offensive – reposition your brand by launching a product extension

57. Defining and Establishing Brand
Mantras
 Brands span product categories and have several
positionings
 Want to establish a relationship between core brand
associations and the brand mantra
 Core Brand Associations
 Attributes and benefits that charactereize the 5-10 most
important aspects of the brand
 Mental maps
 Starbucks Example

59. Brand Mantras
 State the core brand promise/essence in 3-5 words
 Helps internal employees and external marketing partners
understand what the brand represents to the consumer so they
can adjust their own strategies
 Three terms of mantras
1. Function – nature of product and benefits it will provide
2. Descriptive modifier – describe nature of the business function –
Nike
3. Emotional modifier – how the brand provides benefits – Disney
 No other brand should excel in all areas of another brand’s mantra
 Only captures POD’s – reinforce POP’s another way
 Helps determine which categories the brand should extend to

60. Implementing a Brand Mantra
 Should develop mantra at the same time positioning is
determined
 When creating a mantra consider:
 Communicate – mantra should define the brand category and
the uniqueness of the brand
 Simplify – mantras should be short and memorable
 Inspire – relevant to employees
 The brand position is directly related to creating a strong
brand
 Want internal staff members to participate in branding
 More motivated to serve and attract customers, which
increases the overall brand equity

61. Things to Remember:
 Strong brands exhibit more points of difference
 Your brand mantra should correlate with your core brand
associations!
 Achieve customer value by putting customers first!