2/6/20

Brand Management
Building Strong Brands: Introduction

Prof. Suresh Ramanathan

February 6, 2020

2/5/20

Advantages of Strong Brands

Inelastic Elastic responses Greater trade

responses to to price cooperation and
price increases decreases support

Increased
Additional brand
marketing Possible licensing
extension
communications opportunities
opportunities
effectiveness

Source: Strategic Brand Management, Kotler and Keller, 5th edition

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Cop
yrig
ht

What is Brand Equity?

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201
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Edu
cati
on,
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Brand equity is the added value

blis
hin
g
as

endowed on products and

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ntic
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services, which may be reflected in

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the way consumers, think, feel, and

8-3

act with respect to the brand.

Customer-Based Brand
Equity (CBBE)
• “The differential effect of brand knowledge on
consumer response to the marketing of a
brand.” (Keller 1993)

• Customer-based brand equity

- Differential effect
- Customer brand knowledge
- Customer response to brand marketing

Branding, Learning, Fun - 4-

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Customer-Based Brand Equity

Pyramid

BRANDING MAKES A
DIFFERENCE

Branding, Learning, Fun 15

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Illustration of CBBE

Blind test Test with brands

announced

Does not COKE Does not

PEPSI COKE PEPSI
matter matter

Branding, Learning, Fun 16

fMRI pictures
Management

©2015 Dr. Csilla Horváth

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Determinants of Customer-Based
Brand Equity

• AWARENESS
- Customers are aware of and familiar with the brand
• IMAGE
- Customer holds some strong, favorable, and unique
brand associations in memory

Branding, Learning, Fun Keller (199-234)-

Dimensions of Brand Knowledge

Brand
Recognition
Brand Price
Awareness Brand
Recall Packaging
Non-Product-
Related
Attributes User Imagery
Product-
Brand Related Usage Imagery
Knowledge

Types of Benefits Functional

Brand Associations
Experiential
Favorability of
Brand Associations Symbolic
Brand
Image Strength of Attitudes
Brand Associations

Uniqueness of
Brand Associations
(Keller 1993, slightly modified)

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Creating Awareness and Interest: The

Challenge

• Most people tune out

– Need to make ads more relevant
– Need to break through defenses

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The Associative Network

• Consumers store concepts, feelings,

and events in “nodes.”
• Associative links (of varying
strengths) connect the nodes.
• When one node is activated, this
activation spreads along links to
related concepts

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How does associative network influence

retrieval?
• Stronger links are more accessible
– Marketers try to strengthen links between brands and
associations
• Spreading activation
– Explains our seemingly random thoughts
• Responsible for false recall
• Can’t retrieve when link fades

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Associative Memory Network for Corvette

Autos Luxury
Cars
US
Made
Prince Sports car German made

Corvette Mercedes
Porsche
Cheesy

Fast Expensive Prestigious Reliable

Fighter Rolex Watch IBM

Concord
planes PC
Jet

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Associative Memory Network for Corvette

Autos Luxury
Cars
US
Made
Princ
e Sports car German made

Corvette Mercedes
Porsche
Cheesy

Fast Expensive Prestigious Reliable

Fighter Rolex Watch IBM

Concord
planes PC
Jet

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Associative Memory Network for Corvette

Autos Luxury
Cars
US
Made
Princ
e Sports car German made

Corvette Mercedes
Porsche
Cheesy

Fast Expensive Prestigious Reliable

Fighter Rolex Watch IBM

Concord
planes PC
Jet

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Associative Memory Network for Corvette

Autos Luxury
Cars
US
Made
Princ
e Sports car German made

Corvette Mercedes
Porsche
Cheesy

Fast Expensive Prestigious Reliable

Fighter Rolex Watch IBM

Concord
planes PC
Jet

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Determinants of Activation
• 1. Amount of external activation of brand node depends on attention, which, in turn,
depends on:
– Category involvement
– Cognitive resources, distraction
– Movement, intensity, color, contrast, ...
– IAO: interest, ability, opportunity
• 2. Amount of base level activation of brand node, depends on:
– Frequency of experience
– Recency of experience
– "Strength" or salience of experience
• 3. Amount of spreading activation depends on:
– Amount of activation of activating node
– Strength of cue's association with target brand
– Strength of cue's association strength with other brands
– Association strength depends on frequency, recency, salience of concurrent activation -- often
correlated with evaluation

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I want fast food for lunch:

Nedungadi
• Awareness advertising (direct external activation of brand node)

• Two effects:
– Awareness ads increase base level activation
– Awareness ads increase base level activation of subcategory node via spreading activation.

• Joint influence of two effects can have counterintuitive consequence: Advertising that
helps the competition more than it helps you:
– Subcategory base level activation effect increases the chance that subcategory comes to
mind.
– Increased chance that subcategory comes to mind increases the chance that brands in the
subcategory come to mind.
– This increase is stronger for brands more closely linked to the sub-category
– If the sub-category effect is strong, awareness advertising for the less closely linked brand may
help competing, more closely linked brands more than the advertised brand.

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Output competition

• Output competition:
– If several brands are linked (associated) with one cue (e.g., a
goal), then each brand's chance of coming to mind first is a
probabilistic ("error-ful") function of its association strength and its
base level activation.
– This makes it hard to retrieve many brands; you retrieve the same
one(s) over and over again.
– This also means that every additional brand decreases the
chance that your brand comes to mind at any one try, and
consumers try only a limited number of times.

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Part-list cueing: Alba and

Chattopadhyay
• ..but it gets even worse than straight output competition: Part-list cueing
– Coming to mind itself (i.e., being in working memory) increases base level activation
and association strength, which...
– ...makes the difference between remembered and not-yet remembered brands in
terms of base level activation and association strength even greater, in turn...
– ...decreasing the chance that less well-known brands will come to mind even further.

• Conclusion:
– The number of brands that come to mind is usually extremely small (2-8)
– There is a great advantage to being the "first to mind."

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Managing Contradictory
Associations
• Strengthen links to positive
associations
• Weaken links to negative
associations
• Highlight contradictions - highlight
balance between different types
of associations

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Worms

McDonalds

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The association principle: Associative inference from

positive cues

Evaluations
6.11 6.50 10.36 10.25

Rumor Rumor plus Rumor plus No Rumor

Alone Refutation Associative Control
Interference

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Brand Building Implications

• Customers own the brand

• Create rich associations with the

brand

• Proactively manage positive and

negative associations

• Harness the power of thoughts and

feelings to create brand connection

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