Brand Equity
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This document discusses strategic brand management concepts and measuring brand equity. It defines brand equity as the differential effect that brand knowledge has on consumer responses. It identifies key elements of brand equity as brand loyalty, brand awareness, perceived quality, and brand associations. The document discusses how to build and measure each element, and the benefits they provide such as loyal customers and ability to charge a price premium. It emphasizes that managing brand equity requires understanding what drives brand equity according to consumers and how the brand performs on those drivers. Methods discussed for measuring equity include calculating a Brand Equity Index to evaluate brand strength over time and against competitors.
Brand Equity
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- 3. 3 3 Mental maps Competitive frame of reference Points-of-parity and points-of-difference Core brand values Brand mantra Mixing and matching of brand elements Integrating brand marketing activities Leveraging of secondary associations Brand Value Chain Brand audits Brand tracking Brand equity management system Brand-product matrix Brand portfolios and hierarchies Brand expansion strategies Brand reinforcement and revitalization KEY CONCEPTSSTEPS Grow and Sustain Brand Equity Identify and Establish Brand Positioning and Values Plan and Implement Brand Marketing Programs Measure and Interpret Brand Performance
- 4. 4 Concept of Customer Based Brand Equity
- 5. 5 Keller’s Definition of Brand Equity Brand equity is defined as the differential effect that knowledge about the brand has on consumer response to the marketing of that brand Professor Kevin Keller
- 6. 6 What Is Brand Equity? Brand Equity is simply what consumers’ hold in their head about a brand and how that affects their behaviour What consumers doWhat consumers know
- 7. 7 Consumer Based Brand Equity Positive customer-based brand equity results when consumers respond more favorably to the marketing activities when the brand is identified than when it is not The Pepsi Challenge” where consumers prefer Pepsi in a blind taste test but choose Coke when the brand is exposed Nestle Pure Life where consumers are willing to pay price premium as compared to ordinary tap water Classic Examples:
- 8. 8 Benefits of Equity • Loyal Customers • Charge a price premium • Trade co-operation • Brand extensions • Communication messages get through etc etc ……… Building brand equity will improve brand profitability
- 9. 9 Elements of Brand Equity: Brand Loyalty Brand Awareness Perceived Quality Brand Associations
- 10. 10 Brand Loyalty Brand loyalty is a measure of the attachment that a customer has to a brand. It reflects how likely a customer will be to switch to another brand, especially when that brand makes a change, either in price or in product features.
- 11. 11 Brand Loyalty Pyramid Committed Buyer Likes the Brand - Considers it a Friend Satisfied Buyer With Switching Costs Habitual Buyer - No Reason to Change Indifferent – No Brand Loyalty Switchers / Price Sensitive
- 12. 12 Measuring Brand Loyalty • Purchase Behavior Patterns • Switching Cost Analysis • Satisfaction Measurement
- 13. 13 Strategic Value of Brand Loyalty • Reduce marketing cost • Trade (channel distribution) leverage • Attracting new customers
- 14. 14 Enhancing Brand Loyalty • Treat the customer right • Stay close to the customer • Measure/manage customer satisfaction • Create switching cost • Provide extras
- 15. 15 Elements of Brand Equity: Brand Loyalty Brand Awareness Perceived Quality Brand Associations
- 16. 16 Brand Awareness is the ability of a potential buyer to recognize or recall that a brand is a member of a certain product category
- 17. 17 Brand Awareness Hierarchy Top of Mind Brand Recall Brand Recognition Unaware of Brand
- 18. 18 Value of Brand Awareness • Anchor to which other associations can be attached • Familiarity and liking • Signal of substance/commitment • Brand to be considered
- 19. 19 How to Achieve Brand Awareness Be different, memorable Involve a slogan or jingle Symbol exposure Publicity Event sponsorship
- 20. 20 Elements of Brand Equity: Brand Loyalty Brand Awareness Perceived Quality Brand Associations
- 21. 21 The customer's perception of the overall quality or superiority of a product or service with respect to its intended purpose, relative to alternatives. Perceived quality is a perception by customers. Perceived Quality
- 22. 22 What Influences Perceived Quality of Product? • Performance • Features • Conformance with specifications • Reliability • Durability • Serviceability • Fit and finish
- 24. 24 The Value of Perceived Quality • Reason-to-Buy • Differentiate/Position • A Price Premium • Channel Member Interest • Brand Extensions
- 25. 25 Elements of Brand Equity: Brand Loyalty Brand Awareness Perceived Quality Brand Associations
- 26. 26 Brand Association A brand association is anything "linked" in memory to a brand. Thus, McDonald's could be linked to a character such as Ronald McDonald, a consumer segment such as kids, a feeling such as having fun, a product characteristic such as service, or a symbol such as the Golden Arches.
- 27. 27 Some Types of Associations • Product Attributes • Customer Benefits • Relative Price • Lifestyle/Personality • Celebrity/Person • Use/Application
- 28. 28 The Value of Brand Associations • Help Process/Retrieve Information • Differentiate/Position • Reason-to-Buy • Create Positive Attitudes/Feelings • Basis for Extensions
- 29. 29 Maintaining Associations • Be consistent over time • Be consistent over elements of the marketing program • Manage disasters in order to minimize their damage
- 30. 30 Criteria for Brand Name Selection • Be easy to learn and remember • Suggest the product class • Support a symbol or slogan • Suggest desired association without being boring or trivial • Not suggest undesired associations • Be distinctive • Be available and protectable legally
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- 34. 34 Gauging Equity is about determining what is inside a consumer’s head concerning a brand . . .
- 35. 35 . . . And it impacts on how consumers actually react to a brand.
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- 37. 37 This means that managing brand equity requires more than just creating awareness and building favorable associations 1) SOURCES 2) OUTCOMES Managing brands involves knowing your sources of brand equity Brand equity must result in tangible outcomes
- 38. 38 The Outcome Must Be……. • It is a favourite brand amongst consumers • It is a brand consumers are happy to recommend to someone else • It is a brand for which consumers are more willing to pay higher prices Based on the above principle Brand Equity Index for each brand is calculated This index is a single measure of how strong a brand is
- 39. 39 So to Gauge Equity…… What does my consumer find important in this category and how is my brand performing on those drivers?
- 40. 40 Category Drivers: Add up to 100% Are a result of all that has happened in the category in the past Change over time through marketing effort: mid to long term Show you how you or your competitor are changing the rules across consumer segments Set the framework for evaluating our brand strength (Equity) Category Drivers - Explained...
- 41. 41 Brand Equity Index - Explained... Brand Equity Index: Range from 0 to 10 Is a measure of a brands strength on current category drivers Changes over time through marketing effort:short to mid term Shows how you or your competitor are performing within a consumer segment Can be tracked over time to evaluate effectiveness of mktg initiatives
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- 43. 43 Category Drivers What consumers do or feel Consumer Loyalty Price Premium Drivers of the Chocolate Category Awareness (27 % ) Consideration (9 % ) Advertising (16 % ) Product benefit ( 22 % ) For everyone ( 18 % ) Special Benefits(8 % ) Brand Equity Index
- 44. 44 For everyone Product Benefit Advertising Special Benefits
- 45. 45 Brand Equity Indices Initially Galaxy had high equity followed by Nestle Snickers low on equity - low score on Product Benefit - key category driver Min = 0 Max = 10
- 46. 46 How do the main brands perform on key dimensions? Galaxy & Nestle are strong on product benefit which is the most important Equity driver Product Benefit For Everyone Advertisi ng Special Benefits Nestle High High High Low Galaxy High Medium High Low Cadburys Medium High Medium Low Mars Medium Medium Low Low Snickers Low Low Low High Way Forward
- 47. 47 Mirza Shakeel