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Managing Brand Equity

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Brand equity is
a set of brand assets and
liabilities linked to a brand

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Elements of Brand Equity:
Brand Loyalty
Brand Awareness
Perceived Quality
Brand Associations

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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.

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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

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Measuring Brand Loyalty
• Purchase Behavior Patterns
• Switching Cost Analysis
• Satisfaction Measurement

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Strategic Value of Brand Loyalty
• Reduce marketing cost
• Trade (channel distribution) leverage
• Attracting new customers

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Enhancing
Brand Loyalty
• Treat the customer right
• Stay close to the customer
• Measure/manage customer
satisfaction
• Create switching cost
• Provide extras

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Brand Awareness is
the ability of a potential
buyer to recognize or recall
that a brand is a member of
a certain product category

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Brand Awareness Hierarchy
Top of Mind
Brand Recall
Brand Recognition
Unaware of Brand

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Value of Brand Awareness
• Anchor to which other associations can be
attached
• Familiarity and liking
• Signal of substance/commitment
• Brand to be considered

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How to Achieve
Brand Awareness
Be different, memorable
Involve a slogan or jingle
Symbol exposure
Publicity
Event sponsorship

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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

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What
Influences
Perceived
Quality of
Product?
• Performance
• Features
• Conformance with
specifications
• Reliability
• Durability
• Serviceability
• Fit and finish

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What
Influences
Perceived
Quality of
Service?
Appearance
Reliability
Competence
Responsiveness
Empathy

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The Value of Perceived Quality
• Reason-to-Buy
• Differentiate/Position
• A Price Premium
• Channel Member Interest
• Brand Extensions

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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.

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Some Types of
Associations
• Product Attributes
• Customer Benefits
• Relative Price
• Lifestyle/Personality
• Celebrity/Person
• Use/Application

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The Value of Brand
Associations
• Help Process/Retrieve
Information
• Differentiate/Position
• Reason-to-Buy
• Create Positive
Attitudes/Feelings
• Basis for Extensions

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Maintaining
Associations
• Be consistent over time
• Be consistent over
elements of the marketing
program
• Manage disasters in order
to minimize their damage

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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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Brand Management
Developing Brand Vision
Establishing Brand Position
Fulfilling Brand Contract
Communicating Brand Position
Measuring RoBI

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Brand Vision
A clear articulation of the strategic,
financial, and brand goals that
management has created for the brand
A first step to strategic screens as to
where the brand can and cannot go

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Brand Vision
Provides a vision that forces
management to articulate what they
want the brand to "do" for the
organization over the next five years,
relative to brand value, revenue, and
profit contributions

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A brand's positioning is
the place in consumers'
minds that you want your
brand to own—the benefit you
want them to think of when
they think of your brand.

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A strong brand position means the brand
has a unique, credible, sustainable, and
valued place in customers' minds.
Good positioning gives you the direction
required to focus the organization and focus
your strategic efforts.

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A good positioning is a single idea to be
communicated to your customers.
It revolves around a benefit that helps
your product or service stand apart from
the competition.

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Disney
Wal – Mart
Fedex
McDonalds
Apple
Google
Toyota
Family Fun Entertainment
Low Prices and Good Values
Guaranteed Overnight Delivery
Food and Fun
Innovation
Simplicity
Reliability

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A well-crafted brand positioning has three
primary components:
• A definition of the target market you wish to pursue
• A definition of the business your company is in or
the industry or category it competes in
• A statement of your point of difference and key
benefits

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The Five Principles of
Effective Positioning
Fit : Seek to leverage strengths of
existing brand position
Value : Focus on the perceived benefits
that customers value, as determined by
the customer model
Uniqueness : Go where the
competitors are not.

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The Five Principles of
Effective Positioning
Sustainability : Maximize the length of
time this positioning can be owned
within the competitive set
Credibility : Get a credible fit between
who you are and the supplier predicated
by the customer model.

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A Brand Contract is
a list of all promises the brand
makes to customers. Such a
contract is executed internally,
but it is defined and validated
externally by the marketplace.

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Brand Contracts can
and should change
over time. New
promises can be
added, other promises
can be updated, and
irrelevant promises can
be deleted.

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A Brand Contract is a critical piece of the
brand position because it helps to further
define marketplace perceptions and
expectations and forces managers to be
honest with themselves.

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In addition to positive promises to customers, a
Brand Contract can contain negative promises
or attributes. It is important to build on the strong
brand promises and mitigate the negative ones.

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Starbucks' Implicit Brand Contract
• Provide the highest quality coffee available on the market today
• Offer customers a wide variety of coffee options as well as com-
plementary food and beverage items
• Have an atmosphere that is warm, friendly, homelike, and
appropriate for having a conversation with a good friend or
reading a book
• Recognize that visiting Starbucks is as much about the
experience of drinking coffee as it is about the coffee itself

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Successful Brand-Based
Communications
• Use all communication strategies to help
achieve your corporate strategy and brand
vision.
• Let your brand positioning largely determine
the right communications strategy to execute.
• Use an integrated marketing communications
strategy to get maximum return from all dollar
investments.

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Some Metrics to Measure Return on Brand
Investment:
• Brand name knowledge, awareness,
recognition, recall: measures strength of the
brand as reflected by customer's ability to
identify the brand under varying conditions
• Contract fulfillment: measures the degree to
which your brand is upholding its Brand
Contract

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Some Metrics to Measure Return on Brand
Investment:
• Acquired customers: counts customers
claiming they have come to your company based
on the strength of the brand
• Customer loyalty: measures the degree to
which customers continue to purchase your
brand and how long that loyalty has lasted

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• Financial value: reports the financial value of
your brand in the marketplace
• Price premium: finds the percentage of price
premium your brand is able to command over
private-label brands, as well as key competitor
brands
Some Metrics to Measure Return on Brand
Investment:

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