Unit 2

Brand Equity
 Topics of the Session

• Evolution of Brand

• Brand Equity Concept

• Strategic Brand Management Process

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 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.
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 BRAND EQUITY

Brand equity is the added value endowed to product services.

This value reflected in –

How consumers think, feel and act with respect to the brand.

The prices, market share, and profitability that the brand

commands for the firm.

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 BRAND EQUITY
Brand Equity
• Brand Equity is defined as:
– Financial “asset value” of a brand
– Derived from goodwill and loyalty it has built among
customers
– Has high awareness and perceived quality
– Better imagery and personality associations
 BRAND EQUITY

 High Brand Equity brands

Can extract higher prices
Customers repurchase the brands more often than they should
Have loyal customer bases

 Preference and loyalty higher

Not because the product is functionally superior
But consumer perceptions of the brand is better
 BRAND EQUITY

 The associations of the brand in the consumers mind create

An intimacy and loyalty towards the brand.
 The role of marketing is to
Build awareness to communicate high quality
Create or modify product associations
Build higher loyalty
 Direct marketing useful for building brand equity when target segment is
Narrower, and
Difficult to reach
Building Quality Reputation through Direct
Marketing
Communicating Quality
Detailed claims about product features and benefits

Stronger communications about why a product is superior

Can provide customized messages to different customers

Maximize the perceived degree or value and quality communicated

 Brand Equity Concept
Brand Equity is the value, both tangible and intangible, that a brand
adds to a product/service; the added value a brand name identity
brings to a product or service beyond the functional benefits
provided.

The concept of brand equity is measured in two terms:

Brand Equity

Customer-based Market - based

The customer – based brand equity focuses The market – based brand equity aims
exclusively on the relationship customers have at producing measures in dollars,
with the brand euros or yen.
 Customer-based Brand Equity

 It can be defined as the differential effect that brand knowledge has on

consumer response to the marketing of that brand.

1. Brand equity arises from differences in consumer response

2. These differences in response are a result of consumer‟s brand

knowledge.

3. The differential response by consumers that makes up the brand

equity is reflected in perceptions, preferences and behavior related to
all aspects of the marketing of a brand.
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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )

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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 Customer Based Brand Equity or the CBBE Model explores the overall brand
equity through the customer perspective in order to create a strong and a
sellable brand in the market.

 It was first proposed and developed by marketing professor and expert Kevin
Keller in 1993.

 The CBBE Model has 4 distinct levels across 6 branding components.

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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 There are 4 levels in the Customer based Equity Model - Identity, Meaning,
Response and Relationships. The stages are made up of 6 components.

 Stage 1 :


 The biggest question to answer here is “Who are you?”.

 Brand Salience: Brand salience, or awareness, refers to how you are

perceived by your customers. What do they think about your brand, and
is that thinking even accurate?

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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 Stage 2: Understand and communicate the meaning of your brand

 This stage in the model talks about the Performance and Imagery of the brand.

 This is still controlled by the brand managers in order to create a positive brand
experience and makes sure that the brand meets the customer requirements as
expected with a positive brand experience. This stage leads to the third stage
called response.

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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 Stage 2: Components

 Performance: Performance in the model talks about the ability of the brand to
meet the needs as well as wants of the customer in terms of functions, branding,
packaging, pricing etc.

 Imagery: Imagery deals the with the overall brand image in the mind of
customers through identity created in the way customer identifies the brand as
positive. The imagery should appeal the target audience so that the customer can
identify with it through his or her own experiences.
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 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 Stage 3: Response

 Understand how customers judge and feel about the brand. Use feedback to enhance
brand reputation and emotional connections, turning customers into loyal
advocates.
 Judgments: It form a complex perception of the brand based on personal opinions
and decision-making. It represents the image of the brand in customers' minds.

 Feelings: Similarly, brand feelings encompass emotions such as fun, adventure or

security evoked when associating with the brand. Together with judgments, these
feelings form a crucial layer in the CBBE model, influencing how customers
emotionally connect with the brand. 16
 Customer-based Brand Equity Pyramid (CBBE
Model of Brand Equity/ Brand Resonance Model )
 Stage 3: Relationship

 This is the final stage in the CBBE model where the customer forms a
relationship with the brand. The customer is loyal and shows positivity
towards the brand.

 Brand Resonance is the ultimate stage in the CBBE model. The Resonance
is where the customer is totally in sync with the brand equity. The customer is
not only loyal to the product but becomes an advocate of the product and
responds to the changes perfectly.

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Customer-based Brand Equity Pyramid (CBBE Model/ Brand
Resonance Model )

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 Market-based Brand Equity

Market-based brand equity is the financial impact or value a

brand has on consumer behavior and market performance.

It is reflected in how consumers and the market respond to the

brand's marketing efforts, influencing their purchasing decisions,
perceptions, and behavior within the market.

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 Market-based Brand Equity

 Financial Impact: The brand's value reflects its effect on sales,

profit margins, and market share.

 Consumer Behavior: It shapes purchasing decisions, pricing

perceptions, and loyalty in the market.

 Competitive Positioning: It determines the brand's position

compared to competitors, influencing its market share and
profitability.

 Market Perception: The brand's image and perception directly

impact its competitiveness and influence consumer preferences and
choices.

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 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.

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 Need for Building Brand Equity (Contd.)

 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.
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 Building Brand Equity

The initial choices for the brand elements or identities making

up the brand. (Choosing the brand element)

The product and service and all accompanying marketing

activities and supporting marketing programs. (Designing
holistic marketing activities)

Other associations indirectly transferred to the brand by

linking it to some other entity. (Leveraging secondary
associations)
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 Building Brand Equity-1. Choosing brand
elements
The initial choices for the brand elements or identities making
up the brand.
Brand names, URLs, logos, symbols, characters, spokespeople,
slogans, jingles, packages, and signage.

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 Building Brand Equity-1. Choosing brand
elements
Choosing Brand Elements
 Brand element choice criteria:
1. Memorable: easy to recall

2. Meaningful: suggest something relate to the product.

3. Likeability: Appealing

4. Transferable: Wide to new products (Amazon)

5. Adaptable: Updatable

6. Protectable: How legally protectable (Apple Vs Generic Fiberglass-Xerox)

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Building Brand Equity-1. Choosing brand
elements

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Building Brand Equity-1. Choosing brand
elements

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Building Brand Equity-1. Choosing brand elements

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Building Brand Equity-1. Choosing brand elements

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Brand Element- Selection Criteria-Conclusion

Memorable, Meaningful, Likeability are used by the

advertisers or the companies to build the brand

Transferable, Adaptable, Protectable play a defensive role

for leveraging and managing brand equity in the face of
leveraging and managing brand equity in the face of
different opportunities and constraints.

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Building Brand Equity-2. Designing holistic marketing
activities

 Personalization: Personalizing marketing is that the brand and its

marketing are as relevant as possible to as many customers as possible.

 Integration: Integrating marketing involves mixing and matching

marketing activities to maximize their effects.

 Internalization: Internal branding is activities and processes that

help to inform and inspire employees.

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 Building Brand Equity-3. Leveraging secondary
associations
 Brand equity may be created by
linking the brand to other
information in memory that
conveys meaning to consumers.

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 Types of Brand Elements/Choosing Brand Elements to Build Brand Equity -
Options and Tactics for Brand Elements
Brand Elements

Options and Tactics for Brand Elements:

The following are few options and tactics for Brand Elements:

Brand Names: URLs: Logos and Symbols:

Descriptive brand names in which the • Keep the URLs as simple as possible, Various kinds that can be used are:
function is described literally in brand name. • Avoid clichés, • Family Shields
• Use a new term for the real word
• Use catchy phrases

• Fonts
Suggestive brand names in which the
name is suggestive of a benefit provided
by the brand to the customer. • Symbols

• Abstract – shapes and image

 Types of Brand Elements/Choosing Brand Elements to Build Brand Equity -
Options and Tactics for Brand Elements
Brand Elements

Options and Tactics for Brand Elements:

The following are few options and tactics for Brand Elements:

Character: Jingles: Slogans

Represents a specific type of brand •Jingles are nothing but fun a short and striking or
symbol. This element has a tendency musical message written memorable phrase used in
to take on human or real-life about the brand advertising.
characteristics • They often are catchy and
sticky in nature which almost
register in the minds of the
listener
•Dil maange more — Pepsi
Types of Brand Elements/Choosing Brand Elements to
Build Brand Equity -Options and Tactics for Brand Elements

• Colour- Brands also differentiate themselves in the market with the help of
colors they use.

• For instance, red is the color for KFC, their outlets have red as a prominent
color, and their sales staff also differentiate themselves in the market with the
help of colors they use. Similarly, Subway uses green as its unique color.
Similarly, Subway uses green as its unique color.

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Strategic Brand Management Process

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 Step 1: Identifying & Establishing Brand
Positioning and Values
 Brand positioning is crucial, shaping how a brand communicates its value to
customers and steering their buying habits.

 At the core of strategic brand management lies the need to understand what
the brand signifies and how it stands against competitors.

 This involves defining identity, targeting audiences, analyzing rivals, crafting a

unique value proposition, and consistently communicating that uniqueness
across all interactions.

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 Step 1: Identifying & Establishing Brand
Positioning and Values
 It usually involves the following concepts:

 Mental maps: A point-of-view perception of the different brand-

linked associations in the consumer‟s mind. For example for Coca-
Cola, mental maps may include associations like happiness,
refreshment, global presence, and iconic branding, all linked to
the consumer's perception of the brand.

 Points of parity: Convincing customers that an offering similar

to a competitor makes the brand good enough for inclusion in the
category. When Samsung emphasizes reliability, performance,
and a great camera, it's aligning with the industry standard set by
competitors, ensuring its inclusion in the premium smartphone
category.
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 Step 1: Identifying & Establishing Brand
Positioning and Values
 Points of difference: Convincing consumers that the benefits they associate
with a brand would not be found in a competitor brand. Apple's emphasis on
user experience, ecosystem integration, and sleek design differentiates its
products from other smartphone manufacturers, creating a unique value
proposition that competitors struggle to replicate.

 Brand mantra: A short phrase capturing the brand spirit. Nike's "Just Do It"
encapsulates the brand's essence, inspiring action and perseverance, aligning
with their brand ethos and attitude.

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 Step 1: Identifying & Establishing Brand
Positioning and Values
 Core brand associations: Attributes that best
characterize a brand. For example Volvo is known for
safety, reliability, and family-oriented values. These
attributes consistently define and characterize the brand.

 The frame of reference: Recognizing the target market

and identifying the nature of competition. In the fast-food
industry, McDonald's recognizes its target market as
families and individuals seeking convenience and
affordable meals. Understanding this helps them position
themselves against competitors within this context.
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Step 2: Design and execution of brand marketing
programmes
 Once the brand management team has figured out the positioning
strategy, the next step involves planning and implementing marketing
programmes to position the brand.

 The steps involved here are as follows:

 Creating brand elements: Brand elements refer to the brand names, logos,
symbols, URLs, taglines, packaging, etc., that identify and differentiate a brand
from its competitors. Customers associate most with brand elements, facilitating
brand awareness and associations.

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Step 2: Design and execution of brand marketing
programmes
 Choosing brand marketing activities: Integrating brand marketing activities
create favourable and strong brand associations.
For example Dove's "Real Beauty" campaigns promote body positivity and self-
acceptance, creating positive brand associations.

 Tapping secondary associations: This involves linking the brand to

characters, countries, sporting and cultural events, distribution channels, and the
like to improve the brand equity.

 Rolex and Sporting Events: Rolex's association with prestigious sports events
like Wimbledon enhances its image of luxury and excellence.

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 Step 3: Measurement and evaluation of brand
performance
 It is essential to understand the impact of various brand marketing programmes.
To implement a brand equity measurement system, marketers need to complete
the following steps:

 Brand auditing: A brand audit is an overall evaluation of the brand‟s current market
position with respect to its competitors. Conducting a brand audit involves an assessment
of the strengths and limitations of the brand and suggesting ways to improve brand
equity.

 Brand tracking: Brand tracking studies directly collect brand-related information from
consumers over time. It helps measure a brand‟s current health regarding consumers‟
perception and usage.

 Brand equity management system: It refers to a set of tools and research processes
designed to identify the sources and consequences of brand equity. It enables marketers
to develop the best9-43
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possible tactics for building, measuring, and managing brand equity.
 Step 4: Growth and sustenance of brand equity
 Once the brand equity has been built, the real challenge is sustaining and expanding it
overtime to ensure that the brand grows. It is a continuous process and involves the
following steps:

 Establish Brand Architecture: Create guidelines for brand structure, elements, and
strategy including brand portfolio (listing all company brands) and brand hierarchy
(unique and common elements across products).

 P &G has a diverse brand portfolio including Tide, Pampers, Gillette, and others. Their
brand hierarchy ensures distinct yet interconnected brand elements across various
products, maintaining a consistent brand identity.

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 Step 4: Growth and sustenance of brand equity

 Manage Long-Term Brand Equity: Make strategic marketing decisions that

impact brand equity over time, determining the success of future marketing
efforts.

For example: Disney's sustained brand equity stems from their dedication to
storytelling, iconic characters, and family-friendly entertainment. Continual
innovation, new content, theme parks, and global expansion maintain their
emotional connection with audiences across generations.

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 Step 4: Growth and sustenance of brand equity
 Reinforce and Revitalize: Ensure sustained growth by consistently conveying
brand image (reinforcement) and reviving lost sources or establishing new ones
(revitalization) for long-term brand health and sustainability.

 LEGO: As a brand, LEGO has effectively reinforced its image by staying true to
its core values of creativity, learning, and fun. They constantly innovate by
introducing new sets, themes, and collaborations while maintaining their iconic
brick-based play concept. In revitalizing efforts, LEGO launched digital initiatives
like LEGO video games, movies, and online communities, adapting to modern
play preferences. This revitalization allowed LEGO to regain lost market share
and appeal to new generations while preserving its fundamental brand essence.

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 Exercise
Building A creative Brand
1- Build a creative Brand for your company
2- Include :
 Associated Word
 Slogan
 Color
 Design
 Logo
3- allocated time is 20-30 min
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THANK YOU