Kotler14e ippt ch9

9Creating Brand

Equity

1

Copyright © 2012 Pearson Education 9-2

Chapter Questions

What is a brand and how does branding work?

What is brand equity? How is brand equity built, measured, and

managed? What are the important decisions in

developing a branding strategy?


Steps in Strategic Brand Management

1. Identifying and establishing brand positioning

2. Planning and implementing brand marketing

3. Measuring and interpreting brand performance

4. Growing and sustaining brand value


What is a Brand?A brand is a name, term, sign, symbol or

design, or a combination of them, intended to identify the goods or services of one seller or

group of sellers and to differentiate them from those of competitors.

http://www.instantshift.com/2009/01/29/20-corporate-brand-logo-evolution/

http://www.instantshift.com/2009/01/29/20-corporate-brand-logo-evolution/


The Role of Brands

Brands play important roles that improve consumer’s lives and enhance the financial value of the firms

1. Identify the maker – to assign responsibility for its performance

2. Simplify product handling 3. Organize inventory and accounting records4. Offer legal protection (trademarks, patents)


The Role of Brands

5. Signify certain level of quality 6. Create barriers to entry 7. Serve as a competitive advantage 8. Secure price premium


The Scope of BrandingBranding is endowing products and

services with the power of the brand.

A brand resides in the minds of consumers Marketers teach consumers “who” the product is

(giving a name or brand elements), “what” the product does, and “why” consumers should care

Brand differences often relate to attributes and benefits of the product itself

Gucci, Channel, LV understand consumer motivation and desires and creating relevant appealing images around their products


What is Brand Equity?

Brand equity is the added value endowed on products and services, which may be reflected in

the way consumers, think, feel, and act with respect to the brand over time.

As well as the prices, market share, and profitability the brand commends

Customer-based brand equity

Three key ingredients: 1. Brand equity arises from differences in

consumer response. If not, a commodity which compete on price

2. Differences in response are a result of consumer’s brand knowledge (e.g Toyota -reliability)

3. Brand equity is reflected in perceptions, preferences, and behavior related to all aspects of the marketing of a brand

Advantages of Strong Brands

Improved perceptions of product performance

Greater loyalty Less vulnerability to

competitive marketing actions

Less vulnerability to crises

Larger margins More inelastic

consumer response Greater trade

cooperation Increased marketing

communications effectiveness

Possible licensing opportunities


Virgin Atlantic’s Brand Promise


Reinvest the entire travel experience1. Easy-to-use and friendly website and check-in 2. In flight Wi-Fi, spacious leather seats, mood

lighting, and in-seat food and beverage ordering through touch-screen panels. “flying in an iPod or nightclub”

3. Marketing campaign relied on PR, word of mouth, social media, and exemplary customer service to create extraordinary customer experience and build the brand

Virgin Atlantic’s Brand Promise


What is a Brand Promise?

A brand promise is the marketer’s vision of what the brand must be and do for

consumers.

BMW Case

Questions: 1. What are the pros and cons to BMW’s

selective target marketing? What has the firm done well over the years and where could it improve?

2. BMW’s sales slipped during the worldwide recession in 2008 and 2009, Is its segmentation strategy too selective? Why or why not?


Brand Equity Models

Brand Asset Valuator (BAV)

Brandz

Brand Resonance


Figure 9.1 BAV Model

Figure 9.2 Universe of Brand Performance


Figure 9.3 Brandz Brand Dynamics Pyramid


Rational &Emotional

Brand Building Blocks


Figure 9.4 Brand Resonance Pyramid


How often& easy

How well

Personalopinions

Emotionalresponses

Bonding

MasterCard Created An Emotional Bond to its Brand


MasterCard’s “Priceless” campaign reinforce the emotional rewards of the brand


The brand name 42BELOW has both direct product meaningand indirect meaningrelated to its New Zealandorigins

Three main sets of brand equity drivers:1. 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)

2. The product and service and all accompanying marketing activities and supporting marketing programs

3. Other associations indirectly transferred to the brand by linking it to some other entity (a person, place, or thing)

Building Brand Equity

Brand Element Choice Criteria


Memorable – recall & recognize

Meaningful - credibility

Likeable – aesthetically appealing

Transferable – new products in same or different categories

Adaptable & updatable

Protectable – legal trademark

Slogans

Like a good neighbor, State Farm is there

Just do it Nothing runs like a

Deere Save 15% or more

in 15 minutes or less

We try harder We’ll pick you up Nextel – Done Zoom Zoom I’m lovin’ it Innovation at work This Bud’s for you Always low prices


Figure 9.5 Secondary Sources of Brand Knowledge



Internal Branding

Internal branding: consists of activities and process that help inform and inspire employees about brands

Important principles: Choose the right moment: repositioning Link internal and external marketing Bring the brand alive for employees

Measuring Brand EquityFigure 9.6 Brand Value Chain


A structuredapproach to assessing thesources and outcomes of brand equity and the way marketing activities create brand value


Measuring Brand Equity

Brand audits: a consumer-focused series of procedures to assess the health of the brand, uncover its sources of brand equity, and suggest ways to improve and leverage its equity

Brand tracking: collect quantitative data from consumers over time to provide consistent, baseline formation about how brands and marketing programs are performing (to facilitate day-to-day decision making)

Brand valuation: the job of estimating the total financial value of the brand

Figure 9.7 Interbrand Brand Valuation Method


Table 9.4 The 10 Most Valuable Brands



Managing Brand Equity

1. Brand reinforcement: carefully managed so its value does not depreciate by consistently conveying the brand’s meaning in terms of

What product it represents (core benefits, needs to satisfy)

How the brand makes products superior (strong, favorable, and unique in consumer’s mind)

2. Brand revitalization: Development in marketing environment changes and can affect a brand’s fortunes

do we need to reposition?


Devising a Branding Strategy

Branding strategy – called brand architecture Developing new brand elements Apply existing brand elements Use a combination of old and new

Branding Terms

Brand line (all products sold under one brand)

Brand mix (all brand lines a seller makes)

Brand extension=Sub-brand (established brand to introduce new products)

Parent brand Family brand

Line extension (parent brand covers new product in a product category)

Category extension (use parent brand into a different product category)

Branded variants (brand line supplied to retailers or distribution channels)

Licensed product (to manufacturers)


Reasons for Brand Portfolios


Brand portfolio is the set of all brands and brand lines a particular firm offers for sale in a particular category or market segment

Reasons for introducing multiple brands in a category:

1. Increasing shelf presence and retailer dependence in the store

2. Attracting consumers seeking variety3. Increasing internal competition in the firm4. Yielding economies of scale in advertising, sales,

merchandising, and physical distribution


Brand Roles in a Brand Portfolio

Flankers: “fighter” brands are positioned to competitor’s brands

Cash cows: brands are kept around for their profitability with no marketing support

Low-end, entry-level: to attract new customers with low-priced brand (later move to high-end brands)

High-end prestige: High-priced brands often are to add prestige and credibility to the entire portfolio

Brand Extensions


Advantages of Brand Extensions

Improved odds of new-product success1. Increase success rate by facilitating

acceptance of new product2. Reduce production & launch costs 3. Retain consumers who look for variety will

not leave the brand family Positive feedback effects1. Renew interest and liking for the brand and

benefit the parent brand2. Expanding market coverage

Disadvantages of Brand Extensions

1. Cause the brand name to be less strongly identified “Line-extension trap”

2. Brand dilution – consumers no longer associate the brand

Table 9.5 Brand Extendibility Scorecardp. 288

For Review

What is a brand and how does branding work?

What is brand equity? How is brand equity built, measured, and

managed? What are the important decisions in

developing a branding strategy?
