CHAPTER 2: CUSTOMER-BASED BRAND EQUITY

Customer-Based Brand Equity “The differential effect that brand knowledge has on consumer response to the marketing of that brand.” Keller, 1993 12

Customer-Based Brand Equity

Customer-Based Brand Equity Differential effect Differences in consumer response Brand knowledge A result of consumers’ knowledge about the brand Consumer response to marketing Choice of a brand Recall of copy points from an ad Response to a sales promotion Evaluations of a proposed brand extension

Making a Brand Strong: Brand Knowledge Brand knowledge is the key to creating brand equity. Brand knowledge consists of a brand node in memory with a variety of associations linked to it. Brand knowledge has two components: brand awareness brand image.

Sources of Brand Equity Brand awareness Brand recognition Brand recall Brand image Strong, favorable, and unique brand associations 7 7

Brand Recognition

Anyone remembers the slogan? Brand Recall Anyone remembers the slogan?

Brand Awareness Advantages Learning advantages Register the brand in the minds of consumers Consideration advantages Likelihood that the brand will be a member of the consideration set Choice advantages Affect choices among brands in the consideration set

Establishing Brand Awareness Increasing the familiarity of the brand through repeated exposure (for brand recognition) Forging strong associations with the appropriate product category or other relevant purchase or consumption cues (for brand recall)

Creating a Positive Brand Image Brand Associations Does not matter which source of brand association Need to be favorable, strong, and unique Marketers should recognize the influence of these other sources of information by both managing them as well as possible and by adequately accounting for them in designing communication strategies.

Brand Associations

Points-of-Parity & Points-of-Difference Points-of-difference (PODs) are attributes or benefits that consumers strongly associate with a brand, positively evaluate, and believe that they could not find to the same extent with a competitive brand. Points-of-parity associations (POPs), on the other hand, are not necessarily unique to the brand but may in fact be shared with other brands.

Points of Difference Associations A host of PODs are possible including Functional Design Key Attributes Key Ingredients Key Endorsers

Key Ingredients

Key Attributes

Key Endorsers

Functional Design

Points of Parity Associations Category Points of Parity E.g. ATM Machines for banks Competitive Points of Parity E.g. Glazed selling coffee Correlational Points of Parity E.g. Luxury service in a budget airline

Choosing POPs & PODs Desirability criteria (consumer perspective) Personally relevant (is it important to the customer?) Distinctive and superior (is it better than existing options?) Believable and credible (Does it seem possible?) Deliverability criteria (firm perspective) Feasible (Can we do it?) Profitable (Will I make business?) Pre-emptive, defensible, and difficult to attack (Is it competitive?)

Straddle Positions The Straddle Positioning is one of the positioning strategy adopted by the marketers to position their product in two categories simultaneously. The dual positioning of Dominos, product attributes as well as desirable benefits. The product attributes (POP) means providing the fresh pizza and the desirable benefit (POD) are the home delivery that it offers.

Straddle Positions E.g. Subway Sandwiches positioned as offering healthy , good tasting sandwiches . This positioning allows the brand to create a POP on taste and a POD on health with respect to quick serve restaurants such as Mcdonald’s and , at the same time , a POP on health and a POD on taste with respect to health food restaurants . Straddle positioning allows brands to expand their market coverage and potential customer base .

Brand Mantras A brand mantra is a short 3-5 word phrase that captures the spirit of a brand. An articulation of the “heart and soul” of the brand similar to “brand essence” or “core brand promise” Considerations Communicate Simplify Inspire

Brand Mantras