Customer Based Brand equity

the power of brand lies in what resides in the minds of the customers CBBE is defined as the differential effect that the brand knowledge has on consumer response to marketing of that brand

The definition incorporates

What do different brands mean to consumers? What knowledge they have gained about the brand? How does the brand knowledge of consumers affect their response to marketing activity?

In simple sense

+ve CBBE: costumers react more favorably to the marketing programs of the branded product than fictitious or unnamed product in the same category Advantages of +ve CBBE More acceptance of new brand extensions Less sensitive to price increases Less sensitive to withdrawal of advertising support More willing to seek brand -ve CBBE vice-versa

Exercise blind testing

Coors Colt 45

Pabst
Millers lite

Guinness

Budweiser

Exercise blind testing

Coors Pabst Colt 45 Guinness

Millers lite

Budweiser

Resultants

Improved perceptions of product performance Greater loyalty Less vulnerability to competitive marketing actions Larger margins More elastic customer response to price decreases More inelastic customer response to price increases Greater trade support and cooperation Possible licensing opportunities Additional brand extension opportunities

CBBE Model

According to CBBE model, the power of the brand lies in the minds of the consumers and what they have experienced and learned about the brand over time. Consumer knowledge drives the differences that manifest themselves in terms of brand equity.

Brand equity as strategic bridge

As a reflection of past As direction for future

Making brand strong

Brand knowledge: it creates the differential effect that drives brand equity. So finding an insight in how brand knowledge exists in consumer memory.

Associative network memory model

Views memory as a network of nodes and connecting links. Nodes represent stored information or concepts Links represent the strength of association between these. Any type of memory can be stored in the memory network including verbal. Visual, abstract or contextual in nature.

Now..

Brand knowledge can be conceptualized as consisting of brand node in memory with variety of associations. Thus brand knowledge can be characterized in terms of two components. Brand awareness Brand image

Brand awareness

is related to the strength of the brand node or trace in memory, as reflected by consumers ability to identify the brand in different conditions. Consists of brand recognition and brand recall Brand awareness is necessary but not sufficient.

Consequences of brand awareness

Learning advantages: register the brand in the minds of the consumers Consideration advantages: will be a member of consideration set Choice advantages: familiarity Thus in low involvement product minimum level of brand awareness may be sufficient to for product choice even in the absence of well formed attitude.

Elaboration-likelihood model

Influential model of attitude change and persuasion Says that consumers may make choices based on brand awareness considerations when they have low involvement. Low involvement results when consumers lack Purchase motivation Purchase ability

How to build brand awareness?

Increasing the familiarity of the brand through repeated exposure. Communication options such as Advertising Promotion Event marketing Publicity

Brand image

perceptions about brand as reflected by the brand associations held in the consumers memory i.e other informational nodes linked to the brand node in memory. Contain the meaning of the brand to the consumer.

Possible associations
Macintosh Graphics

Innovative

i phone

Educational Apple fruit

Music

Creative

Mac book

Sources of brand equity

CBBE occurs when the consumer has a high level of awareness and familiarity with the brand and holds some strong, favorable and unique brand associations in the memory.

Strength of brand associations.

Strength is the function of both quantity and quality of processing that information receives. Two key factors Personal relevance Consistency with which the information is presented

Brand attribute & benefits

Brand attributes are those descriptive features that characterize a product or service Brand benefits are personal value or meaning that people attach to the product or service attributes. The best source to create strong brand attribute and benefit associations is direct experience.

Favorability of brand associations

Choosing favorable and unique associations Careful analysis of the consumer and competition

Desirability

How relevant consumers find brand associations How distinctive consumers find the brand associations How believable consumers find the brand associations.

Deliverability

Actual or potential ability of the product to performn Current or future prospects of communicating that performance Sustainability of the actual and communicated performance over time.

Uniqueness of the brands

USP Explicitly by making direct comparisons Implicitly May be product related or non product related

Cont..

Point of difference: reason why consumers should buy it Point of parity: atleast no reason why not

Four steps in building strong Brands

Who are you? (brand identity) What are you? (brand meaning) What about you? What do I think or feel about you? (brand response) What about you and me? What kind of association and how much of a connection would I like to have with you? (brand relationships)

So

Ensure identification of the brand with customers and an identification of the brand in customers mind with specific product class or customer needs?

Cont

Firmly establish the totality of brand meaning in the minds of the consumers by strategically linking host of tangible and intangible brand associations with certain properties.

Cont..

Elicit the proper customer responses to this brand identification and brand meaning. Video

Cont..

Convert brand response to create an intense, active loyalty relationship between customer and the brand.

Brand pyramid

Brand salience

Aspects of awareness of brands How easily the brand is evoked under various situations and circumstances Breadth and depth of brand awareness Product category structure : how product categories are organized in memory

The product hierarchy

need family: the core need that underlines the existence of a product family. Product family: all the product classes that can satisfy a core need with reasonable effectiveness. Product class ( product category): a group of products within the product family recognized to have certain functional coherence Product line: group of products within product line that are closely related because they perform a similar function.. Product type: group of items within the product line that share one of several possible form of products. SKU, Variant, item: distinct unit within a brand distinguishable by size, appearance or some other attribute.

Need family Product family

Product class

Product line

Product type
SUV

Item
Scorpio LX, VLX, SLE

Four wheelers Private Public Vehicles Three wheelers

Sedan

transport ation

Two wheelers

Need family Product family

Product class

Product line

Product type
Term
Endowment

Item
Long, short

Life insurance Savings Security Income Financial instrumen ts Equity shares

Mutual funds

Brand performance

Product is at the heart of brand performance Both internal and external communications depend upon how well the product is able to meet its desired expectations.

Meaning

Brand performance relates to the ways in which the product or service attempts to meet customers more functional needs How well it does on.. Quality Utility Aesthetics Economics Any of these may act as a differentiator.

Cont

Five important types of attributes and benefits that underline brand performance Primary ingredients and supplementary features Product reliability, durability, and serviceability Service effectiveness, efficiency and empathy Style and design Price

Brand imagery

Extrinsic properties of product or service, including the ways in which the brand attempts to meet customers psychological and social needs Refers to the intangible aspects of the brand Its through own experience or brand advertising

Four categories of imagery

User profiles Purchase and usage situations Personality and values History, heritage and experiences

Imagery are associations

Gender, race , age Attitudes towards life, careers, possessions, social issues Purchase situations Usage Personality traits of brand

Brand judgments

Consider the following

Brand judgments

refers to customers personal opinions and evaluations with regard to brand Four dimensions Quality Credibility Consideration Superiority

Brand feelings

Emotional responses and reactions with respect to brand. Airtel Warmth Fun Excitement Security Social approval Self respect

Brand Resonance

Ultimate relationship and level of identification that the customer has with the brand. Harley Davidson Yamaha RX-100 Liverpool Bangalore Royal Challengers

Four categories

Behavioral loyalty ( repeat purchase) Attitudinal attachment ( personal attachment, prized possession) Sense of community ( affiliation with same brand users) Active engagement ( join clubs)

Loyalty, attachment community engagement

Quality Credibility Consideration superiority

Warmth, fun Excitement Security Social-approval Self-respect User profiles, purchase and usage situations Personality and values, history , heritage and experiences

Primary characteristics and secondary features, product reliability, durability and serviceability, service effectiveness empathy ,style and design price Category identification Needs satisfied

Brand building implications.

Customers own Brands Dont take short cuts with brands Brands should have dualityc Brand should have richness Brand resonance provides important focus