1. Instructor
Morteza Maleki, PhD

3. What is Brand Equity
AMA 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 & to differentiate them from those of competitors”.
It is a product or service whose dimensions differentiate it in some way from other products or services designed to satisfy the same need.
These differences may be functional, rational or tangible—related to the product performance of the brand.
They may also be more symbolic, emotional, or intangible—related to what the brand represents.

4. What is Brand Equity The Roles of Brands
Brands identifies the source or maker of a product & allow consumers to assign responsibility for its performance to a particular manufacturer or distributor.
Consumers may valuate the identical products differently depending on how it is branded.
Brand signal a certain level of quality so that satisfied buyers can easily choose the product again.

5. What is Brand Equity
Brand loyalty provides predictability & security of demand for the firm, & it creates barriers to entry that make it difficult for other firms to enter the market.
Brands Functions
They simplify product handling or tracing; it helps to organize inventory & accounting records.
It 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; & packaging can be protected through copy rights & proprietary designs.

6. What is Brand Equity The Scope of Branding
Branding is a perceptual entity rooted in reality but reflecting the perceptions & idiosyncrasies of consumers.
Marketers need to teach consumers “who” the product is—by giving it a name & other brand elements to identify it--& what the products does & why the consumers should care.
Successful branding convinces consumers that there are meaningful differences among brands in the product or service category.
Brand differences are related to attributes or benefits of the product itself.

7. What is Brand Equity Defining Brand Equity
Brand equity is the added value endowed on products & services.
It is reflected in the way consumers think, feel, & act with respect to the brand, as well as in the prices, market share, & the profitability the brands command for the firm.
Consumer-based Brand Equity is the differential effect that brand knowledge has on consumer response to the marketing of that brand.
It can be POSITIVE—consumers react more favorably to the product.
It can be NEGATIVE—consumers react less favorably to marketing activity for the brand under the same circumstance.

8. What is Brand Equity
There are three key ingredients of customer-based brand equity;
First, brand equity arises from differences in consumer response.
If no differences occur, then the brand name product is essentially a product or generic version of the product.
Competition will probably be based on price.
Second, differences in response are a result of consumer’s knowledge about the brand.
Brand Knowledge consists of all the thoughts, feelings, images, experiences, beliefs, & so on associated with a brand.
Third, the differential response by consumers that makes up brand equity is reflected in perceptions, preferences, & behavior related to all aspects of the marketing of a brand.
Stronger brands lead to greater revenue.

9. What is Brand Equity Brand Equity as a Knowledge
Money spent on brand equity is an investment in consumer brand knowledge.
The quality of investment in brand building is important than quantity beyond some minimal threshold amount.
Brand knowledge created by marketing investment dictates future direction for the brand.

10. What is Brand Equity Consumers will decide based on
What they feel & think about the brand,
Where & how they believe the brand should go, &
Grant permission (or not) to any marketing action or program.
A brand promise is the marketer’s vision of what the brand must be & do for consumers.
The true value & future prospects of a brand rest with consumers, their knowledge about brand, & their likely response to marketing activity as a result of this knowledge.

11. What is Brand Equity Brand Equity Models BRAND ASSET VALUATOR (BAV)
Developed by advertising agency Young & Rubicam.
It provides comparative measures of the brand equity of thousands of brands across hundreds of different categories.
There are five key components of brand equity;
Differentiation measures the degree to which a brand is seen as different from others.
Energy measures the brand’s sense of momentum.
Relevance measures the breadth of a brand’s appeal.
Esteem measures how well the brand is regarded & respected.
Knowledge measures how familiar & intimate consumers are with the brand.

12. What is Brand Equity

13. What is Brand Equity
Differentiation, energy, & relevance combine to determine energized brand strength.
They point to the brand’s future value.
Esteem & knowledge together create brand stature.
It is more of a “report card” on past performance.

14. What is Brand Equity

15. What is Brand Equity
Strong new brands show higher levels of differentiation & energy than relevance.
Both esteem & knowledge are still lower.
Leadership brands show high levels in all pillars.
Declining brands show high knowledge—evidence of past performance—a lower level of esteem, & even lower relevance, energy, & differentiation.

16. What is Brand Equity BRANDZ Developed by Millward Brown & WPP.
At its heart is the BrandDynamics pyramid.
Brand building follows a sequential series of steps, each contingent upon successfully accomplishing the preceding one.

18. What is Brand Equity

19. What is Brand Equity Presence Relevance Performance Advantage Bonding
Active familiarity based on past trial, saliency, or knowledge of brand promise
Relevance
Relevance to consumer’s needs, in the right price range or in the consideration set
Performance
Belief that it delivers acceptable product performance and is on the consumer’s short-list
Advantage
Belief that the brand has an emotional or rational advantage over other brands in the category
Bonding
Rational and emotional attachments to the brand to the exclusion of most other brands

20. What is Brand Equity BRAND RESOUNANCE MODEL
This model also views brand building as an ascending series of steps, from bottom to top, consisting of four steps as follows;
Ensuring identification of the brand with customers & an association of the brand in customers’ minds with a specific product class or customer need;
Firmly establishing the totality of brand meaning in the minds of customers by strategically linking a host of tangible & intangible brand associations;
Eliciting the proper customer responses in terms of brand-related judgment & feelings, &
Converting brand response to create an intense, active loyalty relationship between customers & the brand.

21. What is Brand Equity
Brand resonance pyramid model emphasizes the quality of brands.
The rational route to brand-building is the left-hand side of the pyramid, whereas the emotional route is the right-hand side.

22. What is Brand Equity

23. What is Brand Equity
Brand Salience is how often & how easily customer think of the brands under various purchase or consumption situations.
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.

24. What is Brand Equity
Brand Judgments focus on customers’ own personal opinions & evaluations.
Brand Feelings are customers’ emotional responses & reactions with respect to the brand.
Brand Resonance refers to the nature of the relationship customers have with the brand & the extent to which they feel they’re “in sync” with it.

25. Building Brand Equity
Marketers build brand equity by creating the right brand knowledge structures with the right consumers.
There are three main sets of brand equity drivers;
The initial choices for the brand elements or identities making up the brand.
Brand names, URLs, logos, symbols, characters, spokespersons, slogans, jingles, packages, & signage.
The product & service & all accompanying marketing activities & supporting marketing programs
Other associations indirectly transferred to the brand by linking it to some other entity
A person, place, or thing

26. Building Brand Equity Choosing Brand Elements
Brand elements are those trademarkable devices that identify & differentiate the brand.
Marketers should choose brand elements to build as much brand equity as possible.

27. Building Brand Equity BRAND ELEMENT CHOICE CRITERIA
Memorable
How easily is the brand element recalled & recognized?
Meaningful
Is the brand element credible & suggestive of the corresponding category?
Likable
How aesthetically appealing is the brand element?
Transferable
Can the brand element be used to introduce new products in the same or different categories?

28. Building Brand Equity
BRAND ELEMENT CHOICE CRITERIA (CON…)
Adaptable
How adaptable & updatable is the brand element?
Protectable
How legally protectable is the brand element?
Note; the first three are “brand building”, whereas the latter three are “defensive”.

29. Building Brand Equity Designing Holistic Marketing Activities
Customers come to know a brand through a range of contacts & touch points;
Personal observation & use,
Word of mouth,
Interactions with company personnel,
Online or telephone experiences, &
Payment transactions.

30. Building Brand Equity
A brand contact is any info-bearing experience, whether positive or negative, a customer or prospect has with the brand, the product category, or the market that relates to the marketer’s products or services.
Marketers are creating brand contacts & building brand equity through many avenues, like
Clubs & consumer communities
Trade shows
Event marketing
Sponsorships
Factory visits
Public relations & press releases, &
Social cause marketing

31. Building Brand Equity PERSONALIZATION INTEGRATION
Personalizing marketing is about making sure the brand & its marketing are as relevant as possible to as many customers as possible.
A challenge, given that no two customers are identical.
Marketers have embraced concepts like
Experiential Marketing
One-to-One Marketing
Permission Marketing
INTEGRATION
Integration marketing is about mixing & matching marketing activities to maximize their individual & collective effect.

32. Building Brand Equity Identity versus Image
Identity is the way a company aims to identify or position itself or its products.
Image is the way the public actually perceives them.
For the right image to be established in the minds of consumers, the marketer must convey brand identity through every available communication vehicle & brand contact.
Identity should be defused through ads, annual reports, brochures, catalogs, packaging, company stationary, & business cards.

33. Building Brand Equity INTERNALIZATION
Internal branding is activities & processes that help to inform & inspire the employees.
Most important in service companies & retailers where all employees need to have an up-to-date, deep understanding of the brand & its promise.
Even distributors & dealers need to be well trained.

34. Building Brand Equity
Brand Bonding occurs when customers experience the company as delivering on its brand promise.
The brand promise will not be delivered unless everyone in the company lives the brand.
Some important principles of internal branding are;
Choose the right moment
Link internal & external marketing
Bring the brand alive for the employees

35. Building Brand Equity Leveraging Secondary Association
Another way to build brand equity is to link the brand to other info in memory that conveys meaning to consumers.
Such secondary sources of info can come from;
The company itself—through branding strategies
The countries or other geographical regions—through identification of product origin
The channels of distribution—through channel strategy

36. Building Brand Equity Leveraging Secondary Association (Con…)
It can also come from
Other brands—through ingredients & co-branding
Characters—through licensing
Spokespersons—through endorsements
Sporting or cultural events—through sponsorship

37. Secondary Sources of Brand Knowledge
Building Brand Equity
Secondary Sources of Brand Knowledge

38. Building Brand Equity The Brand Value Chain
A structured approach to assessing the sources & outcomes of brand equity and the way marketing activities create brand value, based on some premises;

39. Building Brand Equity

40. Measuring Brand Equity
There are two basic approaches to measuring brand equity;
An INDIRECT approach assesses potential sources of brand equity by identifying & tracking customer brand knowledge structures.
The sources of brand equity & how they affect the outcomes of interest.
For this approach, brand audit is important.
A DIRECT approach assesses the actual impacts of brand knowledge on consumer response to different aspects of the marketing.
How these sources & outcomes change if at all.
For this approach, brand tracking is important.

41. Measuring Brand Equity
A brand audit is a consumer-focused series of procedures to assess the health of the brand, uncover its sources of brand equity, & suggest ways to improve & leverage its equity.
Marketers should conduct a brand audit whenever they’re considering important shifts in strategic direction.
Brand-tracking studies collect quantitative data from consumers on a routine basis over time to provide marketers with consistent, baseline info about how their brands & marketing programs are performing on key dimensions.
They are a means of understanding where, how much, & in what ways brand value is being created, to facilitate day-to-day decision making.

42. Measuring Brand Equity

43. Measuring Brand Equity
Brand Valuation
It is the process of estimating the total financial value of the brand.
One method of measuring the brand is interbrand brand valuation

44. Measuring Brand Equity

45. Managing Brand Equity
Effective brand management requires a long-term view of marketing actions.
Brand Reinforcement
Brand equity is reinforced by marketing actions that consistently convey the meaning of the brand in terms of
What products the brand represents, what core benefits it supplies, & what needs it satisfies
How the brand makes the products superior, & which strong, favorable, & unique brand associations should exists in the minds of consumers.

46. Managing Brand Equity Brand Revitalization
The first step in revitalizing a brand is to understand 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.
There is a continuum of revitalization strategy, with pure “back to basics” at one end, pure “reinvention” at the other & many combinations in between.

47. Devising a Brand Strategy
A firm’s branding strategy (Brand Architecture) reflects the number & nature of both common & distinctive brand elements it applies to the products it sells.
Deciding how to brand new product mandates having decision on one of three 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 new & existing brand elements.

48. Devising a Brand Strategy
Brand Extension happens when a firm uses an established brand to introduce a new product.
Sub-brand, as a variation of brand extension, occurs when marketers combine a new brand with an existing brand.
American Express Blue Cards
Toyota Camry Automobiles
The existing brand that gives birth to a brand extension or sub-brand is called Parent Brand.
If the parent brand is already associated with multiple products through brand extensions, it can also be called Master Brand or Family Brand.

49. Devising a Brand Strategy
Brand extension falls into two general categories;
Line Extension, in which the parent brand covers a new product within a product category it currently serves, like with new flavors, forms, colors, ingredients, & package sizes.
Kaleh.com
Category Extension, in which the parent brand is used to enter a different product category from the one it currently serves.
Honda Company

50. Devising a Brand Strategy
A brand line consists of all products—original as well as line & 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 available to buyers.
Branded variants are specific brand lines supplied to specific retailers or distribution channels.
They result from the pressure retailers put on manufacturers to provide distinctive offerings.
A licensed product is one whose brand name has been licensed to other manufacturers that actually make the product.

51. Devising a Brand Strategy
Branding Decisions
The first branding strategy decision is whether to develop a brand name for a product.
FOUR GENERAL STRATEGIES FOR NAMING THE BRANDS;
Individual names (House of Brands)
The advantage here is that the company does not tie its reputation to a product
If the product fails or appears to have low quality, the company name or image does not hurt.
Proctor & Gamble in India has several individual brands in product categories like Vicks (health care), Pantene, Head & Shoulders, & Rejoice (hair care), etc.

52. Devising a Brand Strategy
Blanket family names (Branded House)
This policy is followed by Tata India.
The blanket family name of the company is used in diverse product categories, like Tata Tea, Tata Steel, Tata Automobiles, etc.
Separate family names for all products, &
It uses separate family names for its various products.
The Aditya Birla Group uses this strategy—Ultra Tech for Cement, Hindalco for Aluminum, etc.
Corporate name combined with individual product names
Here, the company name legitimizes, & the individual names individualizes the new product.

53. Devising a Brand Strategy
Individual names & blanket family names are sometimes called “house of brands” & a “branded house” respectively.
They represent two ends of a brand relationship continuum.
Separate family names comes in between the two, & corporate-plus-individual names combine them.

54. Devising a Brand Strategy
The revenue coming from brand extension, may be due to consumers’ switching to the extension from existing parent-brand offerings—in effect cannibalizing the parent brand.
Yet, it may not necessarily be inappropriate if they’re a form of preemptive cannibalization.
Consumers might have switched to a competing brand instead of the line extension if the extension had not been introduced.

55. Devising a Brand Strategy
Success Characteristics

56. Devising a Brand Strategy
Brand Portfolio
All brands have boundaries.
All the segments the firm would like to target may not view the same brand equally favorably.
Some other reasons for multiple branding are;
Increasing shelf presence & 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, & physical distribution

57. Devising a Brand Strategy
The Brand Portfolio is the set of all brands & brand lines a particular firm offers for sale in a particular category or market segment.
The basic principle 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 sizeable enough marketing segment to justify its marketing and production costs.

58. Devising a Brand Strategy
Brand can play a number of specific roles as part of a portfolio;
Flanker (or fighter) brands are positioned with respect to competitors’ brands so that more important (& more profitable) flagship brands can retain their desired positioning.
Cash Cows; some brands may be kept around despite dwindling sales because they still manage to hold on to enough customers & maintain their profitability with virtually no marketing support.
Companies can effectively “milk” these “cash cow” brands by capitalizing on their reservoir of existing brand equity.

59. Devising a Brand Strategy
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 brands.
High-End Prestige; the role of a relatively high-priced brand often is to add prestige & credibility to the entire portfolio.
The aim is to improve the image of the other, more popular products of the company.

60. Devising a Brand Strategy
Advantages of Brand Extension
It facilitates new product acceptance.
Consumers can make inferences & form expectations about the composition & performance of a new product based on what they already know about the parent brand & the extent to which they feel this info is relevant to the new product.
Brand extension can thus reduce the costs of the introductory launch campaign, improves the packaging & labeling efficiencies.
It provides positive feedback to the parent brand & company.
They can help to clarify the meaning of a brand & its core brand values or improve consumer loyalty & perceptions of credibility of the company behind the extension.
Line extension can renew interest & liking for the brand & benefit the parent brand by expanding market coverage.
It may also serve as the basis for subsequent extensions.

61. Devising a Brand Strategy
Disadvantages of Brand Extension
Line extensions may cause the brand name to be less strongly identified with any one product.
Brand delusion occurs when consumers no longer associate a brand with a specific product or highly similar products & 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 & perhaps even frustrated.
Which version of the product is the “right one” for them?

62. Devising a Brand Strategy
Disadvantages of Brand Extension (Con…)
An extension may not only fail, but harm the particular brand image in the process.
“Marketing Failures”, where insufficient consumers were attracted to a brand, are much less damaging than “Product Failures”, where the brand fundamentally fails to live up to its promise.

63. Assignment Case Studies on Pages 269-272 Proctor & Gamble McDonald

64. The End