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Chapter 4: Brand Equity.

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1 Chapter 4: Brand Equity

2 Contents The concept of brand equity Steps in building a brand
Sources of brand equity

3 Introduction Building brands is an important aspect of marketing for the long-term sustenance of a firm. A brand name not only imparts recognition to a product but gives it an identity. In the same product class, products of different firms can have different meanings for consumers. The question is how do consumers associate these different meanings to different brands? This is because a brand name adds value to a product beyond the brand elements and the value added depends on customer perception

4 Brand Equity defined ‘Brand equity can be thought of as the additional cash flow achieved by associating a brand with the underlying product or service’ (Biel 1992).

5 Brand Equity defined ‘Brand equity is a set of brand assets and liabilities linked to a brand, its name, and symbol, that adds value to or subtracts from the value provided by a product or service to a firm and/or to that firm’s customers’ (Aaker 1991).

6 Brand Equity defined ‘The differential effect the brand knowledge has on consumer response to marketing of that brand’ Keller, 2004 Keller (2004) defines brand equity from the customer’s perspective

7 Need for Building Brand Equity
Brand equity has a positive influence on market power. It positively impacts consumers’ willingness to pay price premiums. It leads to ‘higher efficiency and effectiveness of their marketing programs’. It positively impacts the company’s market share. It results in improved future profits and long-term cash-flow. It can build brand loyalty, which in turn reduces marketing costs.

8 Need for Building Brand Equity
It can deliver emotional, safety, prestige, or other benefits that are important to consumers. It reduces the anticipated risk, enhances anticipated confidence in the brand purchase decision, and increases satisfaction with the brand. It leads to sustainable competitive advantage. It ultimately leads to marketing success for the brand. Strong brand equity can help in achieving success for new products launched as brand extensions.

9 Brand Resonance Pyramid
Brand relationship and brand loyalty Step 4 Developing Brand response Judgments Feelings Step 3 Forming Brand meaning Performance Image Step 2 Step 1 Creating Brand Identity

10 Brand Equity in a Business to Business Context
Brand identity — Manufacturer’s brand salience Brand meaning — Includes performance and reputation Brand response — includes judgements and sales force relationships Brand relationships — partnership solutions

11 Sources of Brand Equity
Joint Branding programmes Perceived Advertising spending Corporate Societal Marketing Brand knowledge Brand elements Brand associations Building Brand Equity Brand community Perceived quality Country-of- origin Brand loyalty Company image Endorsements Events, third party Distribution channels

12 Levels of brand awareness
Level 6: Opinion about Bbrand Level 5: Knowledge of the Bbrand Level 4: Brand supremacy Level 3: Top-of-the mind recall Level 2: Brand recall Level 1: Brand recognition

13 Quick Recapitulation The concept of brand equity
Steps in building a brand Sources of brand equity

14 Questions?

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